• President Trump said he expects a productive meeting with President Xi Jinping, fueling cautious optimism for a near-term trade truce.
  • Markets are watching for signals on tariffs, technology controls, and agricultural deals, with any agreement likely limited in scope.
  • Analysts caution that structural tensions remain, and past patterns suggest incremental concessions rather than a comprehensive reset.

President Donald Trump said on Thursday he believes his upcoming meeting with Chinese President Xi Jinping will be “good,” offering a glimmer of hope for stabilizing fraught U.S.-China trade relations. The comments come amid escalating tariff threats and technology controls that have rattled global supply chains.

“I think the meeting with Xi is going to be good,” Trump told reporters before departing the White House, declining to elaborate on specific agenda items. The two leaders are expected to discuss tariffs, rare earths, and agricultural exports, according to people familiar with the matter. Markets rallied modestly on the news, with the S&P 500 edging higher as investors priced in a potential pause in the trade war.

Behind the optimism, however, lies a more complex reality. The U.S.-China relationship remains mired in deep disagreements over technology transfer, intellectual property, and regional security in Taiwan. “Any deal is likely to be tactical and limited,” said a trade analyst who asked not to be named. “We’ve seen this pattern before—high-level optimism followed by targeted concessions, but no fundamental shift.”

Past summits between Trump and Xi have often produced short-lived truces. In 2019, a similar meeting led to a temporary tariff ceasefire, only for tensions to reignite months later. This time, both sides are under pressure: Trump faces a domestic economy grappling with inflation, while Xi navigates a sluggish post-pandemic recovery.

Business groups are bracing for incremental changes. “We’re not expecting sweeping reforms,” said a supply chain executive. “Companies will continue to diversify away from China, regardless of the meeting’s outcome.” The White House has not confirmed the meeting’s date or location, though reports suggest it could occur on the sidelines of an international summit.

Correction: An earlier version of this article misstated the market reaction. Stocks rose, not fell, following Trump’s remarks.