Trump and Xi Reset Talks but Leave Markets Wanting More

Markets wobbled Friday after the much-anticipated call between U.S. President Donald Trump and Chinese President Xi Jinping produced polite signals of progress but little in the way of hard commitments. The two leaders agreed to meet in person at the Asia-Pacific Economic Cooperation (APEC) summit in South Korea next month, and Trump announced plans to visit Beijing early next year, with Xi making a reciprocal trip to Washington “at an appropriate time.” Yet investors had been hoping for concrete steps on two fronts—TikTok’s U.S. operations and new Chinese purchases of American goods—and both items came away unresolved.

The TikTok issue has become a political flashpoint in Washington, with the app facing a ban unless its Chinese parent ByteDance spins off U.S. operations. Trump said “progress” was made and thanked Xi for “approving” the deal, but offered no details. China’s official readout avoided the subject of ownership and instead stressed that any arrangement must comply with domestic law and respect Chinese intellectual property, including TikTok’s algorithm. ByteDance later issued a statement thanking both leaders and pledging to keep the app available to U.S. users, but analysts noted the core questions—who controls the data and whether the algorithm can legally be transferred—remain unanswered. As Craig Singleton of the Foundation for Defense of Democracies put it, Beijing continues to hold a de facto veto, while Trump portrays himself as final arbiter.

On trade, expectations were also dialed back. Trump and Xi spoke broadly about cooperation on issues including fentanyl flows and the Ukraine war, but markets had been hoping for more tangible signals—such as commitments by China to buy additional U.S. agricultural goods or aircraft from Boeing. No such headlines materialized. Instead, Xi urged the U.S. to avoid new tariffs and provide a “fair environment” for Chinese investors. The White House characterized the conversation as “very productive,” but with Trump recently imposing additional levies on Chinese imports tied to fentanyl concerns, skepticism lingers over how far either side is willing to compromise.

For investors, the absence of fresh commitments was disappointing. U.S. farm exports to China have already plunged more than 50% year-to-date, with sorghum shipments nearly disappearing, and the agriculture sector had been looking for relief. Aerospace investors likewise saw no mention of large plane purchases, a traditional goodwill gesture in prior rounds of diplomacy. Without these confidence-building steps, markets rolled over into the afternoon, with traders concluding that while the optics of renewed dialogue are constructive, the substance still lags.

The geopolitical subtext is hard to ignore. Trump credited TikTok with boosting his re-election campaign, and is reluctant to alienate its large U.S. user base. At the same time, Republicans and Democrats alike have warned against any deal that leaves ByteDance in control of TikTok’s algorithm or U.S. user data. Meanwhile, Xi faces his own domestic pressures, with China’s economy slowing and global trade partners turning more protectionist. Friday’s call therefore looked more like a staging exercise: both leaders signaling cooperation without yet conceding ground.

Markets will now focus on two key dates. The APEC summit at the end of October offers the next venue for a high-profile handshake and potentially new trade pledges. Then, Trump’s planned trip to China early next year could become the platform for a broader bargain—one that addresses tariffs, export controls, and agriculture in a package deal. Whether that materializes will depend on how negotiations proceed in the coming weeks. U.S. and Chinese officials have already held four rounds of talks since May and are expected to continue meeting.

The broader trade war remains unresolved. Trump has capped tariffs on Chinese goods at 30% under a temporary framework, while Beijing has imposed additional duties of 10–15% on U.S. farm products. Those arrangements expire in November unless extended, raising the stakes for progress. Export controls on semiconductors, rare earths, and other strategic products also remain points of tension. Both sides couched Friday’s call as “constructive,” but investors have heard similar language before, only to see talks collapse.

For financial markets, the key takeaway is that the diplomatic calendar remains active but uncertain. Tech investors will continue to monitor developments around TikTok, particularly whether the algorithm issue can be resolved in a way that satisfies U.S. security concerns. Agricultural and aerospace names may trade cautiously absent new purchase commitments. More broadly, the lack of concrete breakthroughs underscores the fragility of the trade truce, especially with tariff deadlines approaching.

Bottom line: Trump and Xi kept the dialogue alive and set the stage for further engagement, but markets wanted more than symbolism. Until investors see hard commitments on trade or a definitive TikTok resolution, caution is likely to dominate trading around U.S.–China headlines. The upcoming APEC summit will be the next major test of whether the two sides can turn cordial phone calls into actionable deals.