Trump-Xi Call Unlikely to Move Trade Talks, But TikTok Agreement Signals Possibility
A much-anticipated phone call between President Donald Trump and Chinese President Xi Jinping is scheduled for tomorrow, but expectations for a breakthrough on trade are low. While the discussion is unlikely to alter the course of U.S.-China trade relations, some analysts believe any diplomatic engagement is a positive sign.
“A phone call tomorrow between President Trump and Chinese President Xi is not expected to move the trade needle between the two countries, but progress is being made. In fact, a framework of an agreement with China over the ownership of the popular TikTok app is a long way from a trade agreement involving American agriculture.”
The limited progress being made, specifically regarding TikTok, is seen as symbolic. Though unrelated to American agriculture or tariff disputes, it highlights that the U.S. and China can still negotiate, which could bode well for future agreements.
“But as one analyst pointed out, at least it shows the two countries have the potential to reach any kind of agreement.”
However, major agricultural and trade concessions are likely on hold. As covered in an earlier Bottom Line Report, China appears to be delaying significant movement until the U.S. Supreme Court rules on the legality of the Trump administration’s tariffs.
“At the same time, as we mentioned in an earlier report, we look for China to stonewall any kind of a trade agreement until it learns the U.S. Supreme Court decision on the legality of the Trump tariff.”
Still, China may not wait idly. President Xi could adjust his position based on how the court ruling unfolds.
“But that being said, Xi may hedge his position, giving ground in the event that the court sides with the president.”
As this geopolitical backdrop unfolds, economic indicators are also shifting.
“This is the Bottom Line report. The dollar near three-month lows as we move to the end of the week. Crude oil, meanwhile, near three-week highs.”
Audio Reporting by Mark Oppold for Southeast AgNet.