What the Trump-Xi summit means for Asia’s supply chains
12 May 20264 min read
Summary
- US President Donald Trump is set to arrive in Beijing on 14 May for the first American presidential visit to China since 2017, with trade terms covering rare earths, semiconductors and ship port fees on the agenda.
- The two-day talks will determine whether the current 90-day tariff truce extends, with a proposed board of trade mechanism intended to formalise which goods each country can exchange without crossing national security red lines.
- For manufacturers and freight operators across Asia, the outcome sets the terms of supply chain architecture for the next phase of the US-China trade relationship.
US President Donald Trump is set to arrive in Beijing on 14 May for the first American presidential visit to China since 2017, with the terms of the bilateral trade relationship directly on the table. The agenda covers rare earth export controls, semiconductor curbs, fentanyl enforcement commitments and a proposed board of trade mechanism intended to define what the two countries can sustainably exchange without crossing national security red lines.
The visit was originally planned for March but was delayed by the Iran conflict. It now arrives at a moment of compressed urgency: the 90-day tariff truce brokered earlier in 2026 is time-limited, and neither side has signalled a clear path to extension without formal commitments on the contested items. For Asia’s manufacturing sector, the truce was the primary reason factory planning timelines stabilised after the tariff escalation of early 2026.
The board of trade concept, if formalised, would represent a structural change in how the two economies interact. Under the proposed framework, each side would publish a categorised list of goods cleared for exchange and goods subject to restriction. This would replace the current system where restrictions arrive through executive orders and enforcement actions with little advance notice. Supply chain planners have described the current approach as building to a moving target.
Rare earths are the highest-stakes item on the table. China controls approximately 90 per cent of global rare earth processing capacity, according to the International Energy Agency. In April 2025, China’s Ministry of Commerce imposed export licence requirements on seven rare earth elements, including dysprosium and terbium, which are essential for the permanent magnets used in electric vehicle motors and defence hardware. US manufacturers absorbed those controls by drawing on stockpiles built before the restrictions took effect. Those stockpiles will not last indefinitely.
Semiconductor export controls run in both directions. The US has tightened restrictions on advanced chip technology exports to China through successive rounds of additions to the Entity List, a Commerce Department register of foreign organisations required to seek licences before receiving certain US technology. China has responded with its own controls on gallium and germanium, two materials used in compound semiconductors and radar systems. The summit is expected to produce at least a partial easing on the rare earth side in exchange for US commitments on chip equipment, a trade that would affect supply chains from Japanese toolmakers to Korean memory chipmakers to Taiwanese foundries.
Ship port fees are the less-discussed but operationally significant item on the agenda. The US Trade Representative’s proposed levy on Chinese-built vessels entering American ports has left container lines uncertain about how to price contracts for 2027 and beyond. A framework agreement at the summit is expected to clarify the fee structure and phasing timeline, removing a variable that carriers have held in abeyance for months.
The three-item agenda is not arbitrary. Rare earths, semiconductors and ship port fees each represent a different class of trade lever: a natural-resource dependency, a technology-transfer concern and a market-access tool applied to a third-country industry. Resolving all three in a single bilateral framework would signal a degree of structural maturity in the relationship that has been absent since 2018. It would also give supply chain planners a more durable foundation than the executive-order-by-executive-order pattern of the past eight years.
The 90-day truce expires before the end of July. If the summit produces a joint communiqué with specific commitments on rare earths and port fees, the two sides have signalled through ongoing talks that a truce extension remains on the table, with the board of trade mechanism entering a drafting phase. NBC News and CNBC reported ahead of the summit that US and Chinese negotiating teams had launched parallel talks on the extension timeline. If talks stall, tariff escalation resumes on a compressed schedule.
Companies that have already moved production capacity to Vietnam, India or Mexico are largely insulated from a return of tariffs. Companies that retained China-heavy sourcing in anticipation of a trade settlement face the most exposure if the talks fail to produce binding commitments.
The summit may not resolve the US-China trade relationship, but it will determine how much clarity supply chain planners can work with for the rest of 2026.
The visit was originally planned for March but was delayed by the Iran conflict. It now arrives at a moment of compressed urgency: the 90-day tariff truce brokered earlier in 2026 is time-limited, and neither side has signalled a clear path to extension without formal commitments on the contested items. For Asia’s manufacturing sector, the truce was the primary reason factory planning timelines stabilised after the tariff escalation of early 2026.
The board of trade concept, if formalised, would represent a structural change in how the two economies interact. Under the proposed framework, each side would publish a categorised list of goods cleared for exchange and goods subject to restriction. This would replace the current system where restrictions arrive through executive orders and enforcement actions with little advance notice. Supply chain planners have described the current approach as building to a moving target.
Rare earths are the highest-stakes item on the table. China controls approximately 90 per cent of global rare earth processing capacity, according to the International Energy Agency. In April 2025, China’s Ministry of Commerce imposed export licence requirements on seven rare earth elements, including dysprosium and terbium, which are essential for the permanent magnets used in electric vehicle motors and defence hardware. US manufacturers absorbed those controls by drawing on stockpiles built before the restrictions took effect. Those stockpiles will not last indefinitely.
Semiconductor export controls run in both directions. The US has tightened restrictions on advanced chip technology exports to China through successive rounds of additions to the Entity List, a Commerce Department register of foreign organisations required to seek licences before receiving certain US technology. China has responded with its own controls on gallium and germanium, two materials used in compound semiconductors and radar systems. The summit is expected to produce at least a partial easing on the rare earth side in exchange for US commitments on chip equipment, a trade that would affect supply chains from Japanese toolmakers to Korean memory chipmakers to Taiwanese foundries.
Ship port fees are the less-discussed but operationally significant item on the agenda. The US Trade Representative’s proposed levy on Chinese-built vessels entering American ports has left container lines uncertain about how to price contracts for 2027 and beyond. A framework agreement at the summit is expected to clarify the fee structure and phasing timeline, removing a variable that carriers have held in abeyance for months.
The three-item agenda is not arbitrary. Rare earths, semiconductors and ship port fees each represent a different class of trade lever: a natural-resource dependency, a technology-transfer concern and a market-access tool applied to a third-country industry. Resolving all three in a single bilateral framework would signal a degree of structural maturity in the relationship that has been absent since 2018. It would also give supply chain planners a more durable foundation than the executive-order-by-executive-order pattern of the past eight years.
The 90-day truce expires before the end of July. If the summit produces a joint communiqué with specific commitments on rare earths and port fees, the two sides have signalled through ongoing talks that a truce extension remains on the table, with the board of trade mechanism entering a drafting phase. NBC News and CNBC reported ahead of the summit that US and Chinese negotiating teams had launched parallel talks on the extension timeline. If talks stall, tariff escalation resumes on a compressed schedule.
Companies that have already moved production capacity to Vietnam, India or Mexico are largely insulated from a return of tariffs. Companies that retained China-heavy sourcing in anticipation of a trade settlement face the most exposure if the talks fail to produce binding commitments.
The summit may not resolve the US-China trade relationship, but it will determine how much clarity supply chain planners can work with for the rest of 2026.