Morgan Stanley: US-China Summit Likely to Reinforce Managed Competition - FJElite

The September 24 Trump-Xi summit is expected to reinforce the current framework of managed strategic competition rather than produce a major breakthrough. The May meeting delivered sector-specific commercial agreements, new trade and investment dialogue mechanisms, and a commitment to continued engagement, but did not resolve the larger structural disputes. The more useful framework remains stabilisation rather than normalisation.

The main focus will be whether that stabilisation can hold into November, when several temporary measures expire at the same time, including Section 301 exclusions, the BIS Affiliates Rule suspension and China’s Wave 2 rare earth controls. China’s separate export licensing regime on seven heavy rare earth elements remains in force, with US imports of yttrium already sharply lower. The summit should therefore offer clues on whether re-escalation risk is building or whether both sides intend to maintain the current path.