SINGAPORE—The optics of this week’s summit between Donald Trump and Xi Jinping were carefully staged to signal parity between the United States and China. Trump, the first US president to visit mainland China in nearly a decade, was accompanied by an entourage of American CEOs—including Tesla’s Elon Musk (with his son X), Apple’s Tim Cook, Boeing’s Kelly Ortberg, and Nvidia’s Jensen Huang—whose businesses rely on maintaining good relations with the People’s Republic. They were duly given a grand welcome in the Great Hall of the People.
But the summit’s (less photogenic) substance may matter more. If the meeting cements two outcomes—a longer-lasting Sino-American trade truce and a path to reopening the Strait of Hormuz—it will give the world economy something it has lacked for the past year and a half: a reduction in tail risks.
On the matter of trade, the October 2025 Busan agreement between the US and China did halt implementation of most of Trump’s punitive tariffs, with China agreeing to ease its rare-earth export controls. The economic implications of a summit-level agreement to extend this truce through 2027 would be difficult to overstate. China processes roughly 85% of the world’s rare earths and over 90% of its rare-earth magnets—inputs in every electric vehicle, wind turbine, F-35 fighter jet, and Nvidia AI accelerator (an advanced data-processing platform). A stable supply removes a binding constraint on multiple Western industries at once.
The likely winners are easy to identify. Boeing, starved of Chinese orders since 2019, may finally receive the type of headline-making aircraft purchase that Trump can boast about back home. Apple would gain a more reliable supply of rare-earth magnets for everything from speakers to camera modules. Tesla would benefit from clearer rules for its Shanghai gigafactory, which now produces more than half of its global output. And American farmers—a constituency Trump cannot ignore—would regain access to the Chinese soybean and grain import markets, which quietly redirected their orders to Brazil and Argentina.
Read more: The World Economy After the Trump-Xi Summit
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