Next Thursday, President Trump will sit down with Chinese President Xi Jinping. This high-profile meeting may mark the beginning of the end in the prolonged trade war between the two heavyweights. This meeting comes after months of increasingly bitter tariff conflicts and a semiconductor cold war. Now, fierce political wrangling has characterized US-China relations in the run-up to this moment.
This meeting is particularly timely. It follows a consecutive period of over a year where the United States dealt with the absence of inflation information. All eyes on new inflation data. Market analysts are looking with bated breath to new inflation data. Though a lack of information persists due to recent government shutdowns that stopped data collection and reporting. The lack of usable, trustworthy economic indicators have led investors and policymakers to scramble to gain insight into how attractive an investment opportunity the U.S.
As Trump and Xi prepare to engage in discussions, market participants are closely monitoring the potential implications of their dialogue. The result of this meeting will have an effect on bilateral relations and set the tone for the global economic climate. Investors are optimistic that movement on new commitments to work through remaining concerns might bring predictability and trust back to the markets.
During the last several months, tariffs have been at the forefront of the embroiled debate. Both countries have retaliated with a series of tariffs on each other’s products, disrupting trade flows and contributing to slow economic growth. Additionally, the ongoing semiconductor supply chain crisis has further intensified the rivalry, prompting both countries to bolster their technological capabilities.
And with important inflation numbers likely to be released a few days after the anticipated meeting between President Trump and Chairman Xi, the timing could not be more critical. Economists expect these numbers to provide key clues as to where the US economy stands today. In doing so, they’ll illuminate its path to recovery. Investors are especially watchful, since inflation data affects the financial markets and sways monetary policy—all perhaps more than is usually the case.