Episode
What to Expect From the U.S.-China Summit
- Podcast
- Thoughts on the Market
- Published
- May 13, 2026
- Duration seconds
- 260
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Summary
Our Head of Public Policy Research Ariana Salvatore goes through the main topics on the table during the meeting between Presidents Trump and Xi: Taiwan, tariffs and the Iran conflict. Read more insights from Morgan Stanley. ----- Transcript ----- Ariana Salvatore: Welcome to Thoughts on the Market. I'm Ariana Salvatore, Head of Public Policy Research for Morgan Stanley. Today, I'll be talking about expectations heading into the U.S.-China summit this week and what investors should be watching. It's Wednesday, May 13h at 11am in Copenhagen. Despite the importance of the upcoming summit, we think expectations for tangible progress should remain relatively modest. Reporting ahead of the meeting indicates that the discussions will focus on trade, Taiwan arms sales, and the U.S.-Iran conflict. Across the board, our base case remains an extension of the current truce with limited areas of relaxation. That's probably enough to support modest upside for risk assets in China, but likely short of the kind of breakthrough needed for a material re-rating in risk premia. Let's start with trade. We think the discussion here is likely to skew toward phase one style commitments rather than structural policy shifts. That could include additional Chinese purchases in sectors like agriculture and aerospace, or things like high-level trade and investment pledges. Or even limited tariff relief in key areas designed to demonstrate cooperation but without fundamentally changing the competitive dynamic between the two countries. What we don't expect is a meaningful unilateral tariff reduction from the U.S. side heading into the summit. Remember, China still faces an effective tariff rate of around 30 percent, and it benefited the most of all our trading partners…