World Economy

Trump-Xi Summit Expected as Trade Deficit Remains Stubbornly High

U.S. President Donald Trump and Chinese President Xi Jinping are scheduled to meet this week for their second in-person summit of 2026, as trade tensions between Washington and Beijing persist despite previous diplomatic efforts.

The U.S. trade deficit with China dipped to its lowest level since 2017 following tariff escalations last April, but has since climbed as demand for artificial intelligence-related components surged. China Customs data shows the deficit remains largely unchanged from pre-tariff levels, indicating import duties have failed to significantly curb American purchases of Chinese goods.

Businesses are hoping the leaders will extend a trade truce negotiated last fall. However, global supply chain realities complicate negotiations. Asia still accounts for more than 60% of U.S. imports. Roughly half to three-quarters of container traffic from China routes through Southeast Asia to other destinations, reinforcing worldwide dependence on Chinese manufacturing.