• Xi Jinping is expected to urge President Trump to halt new U.S. arms sales to Taiwan and deliveries from existing orders during a Washington summit this week, Reuters reports.
  • A $14 billion U.S. arms package for Taiwan remains on hold, with Trump previously describing it as a negotiating chip.
  • The outcome could have significant implications for defense contractors like Anduril Industries and broader U.S.-China relations.

Chinese President Xi Jinping is set to arrive in Washington on Wednesday for a high-stakes summit with President Donald Trump, where he is expected to press for a halt to U.S. arms sales to Taiwan, according to people familiar with the matter. Formal talks are scheduled for Thursday, with a possible visit to the National Archives on Friday. Beyond seeking to block new sales, Beijing is also demanding that Washington stop delivering weapons that Taiwan has already purchased, a move that would mark a significant escalation in China's efforts to assert its sovereignty claims over the island.

The immediate decision point is a proposed $14 billion arms package that Trump has held for months as leverage, even as U.S. law requires providing Taiwan with defensive means. The White House has said Trump will decide on the package “in a fairly short time,” but no approval has been announced. In December, the administration approved an $11 billion Taiwan arms package—the largest ever—but the additional $14 billion proposal remains frozen. China is reportedly invoking its interpretation of the 1982 U.S.-China joint communiqué, which stated a U.S. intention to gradually reduce arms sales to Taiwan over time. However, the Reagan-era “Six Assurances,” declassified in 2020, clarify that the U.S. did not set an end date for such sales or agree to consult Beijing in advance, providing a basis for Washington's rejection of a Chinese veto.

The standoff has direct commercial implications for U.S. defense suppliers. Anduril Industries, a defense-technology company focused on autonomous systems, has seen its Taiwan business affected by the delayed package. Founder Palmer Luckey said the hold is already slowing progress, though he did not specify which contracts are impacted. China sanctioned Luckey in December over arms sales to Taiwan, highlighting the risks for U.S. suppliers. Taiwan last year unveiled the Barracuda-500 autonomous cruise missile for joint production with Anduril, underscoring the island's push for asymmetric defenses.

The geopolitical stakes are immense. Taiwan produces more than 90% of advanced semiconductors, making its security critical to global supply chains. A major confrontation in the Taiwan Strait could disrupt supplies of leading-edge chips used in phones, servers, vehicles, and military systems. Meanwhile, China has increased military activity around Taiwan, including live-missile tests, and is reportedly weighing economic retaliation, such as leveraging its dominance in rare earths. Trump has framed the arms package as a bargaining chip, while allies like Japan worry that a Taiwan concession could be exchanged for Chinese purchases of U.S. goods. Congressional pressure is running in the opposite direction: Republican Senator Pete Ricketts and House Select Committee on China Chairman John Moolenaar have publicly urged Trump not to accommodate Chinese objections.

Analysts do not expect a grand bargain on Taiwan this week. Former Trump deputy national security adviser Matt Pottinger said he did not anticipate anything “substantive” on the issue, though Xi is expected to press it at length. The key signal will be whether Trump approves, further delays, narrows, or conditions the $14 billion package. If approved, Beijing would likely protest and could respond through diplomatic measures, sanctions on contractors, or military activity. If delayed or curtailed, Taiwan’s acquisition timelines would be constrained, and regional allies might question the credibility of U.S. security commitments. The White House did not respond to a request for comment. This article was updated to include background on the 1982 communiqué and the Six Assurances.