Trump-Xi Beijing Summit: US Approves NVDA H200 Sales, Yuan Rallies

The Trump-Xi summit in Beijing represents a potential inflection point in US-China relations after months of trade brinkmanship. Trump arrived alongside a delegation of tech giants including Elon Musk, Tim Cook, and business titans, signalling a willingness to find common ground on commercial matters. Early signals from the two leaders were cordial, with Xi emphasizing that common interests outweigh difficulties and Trump echoing optimism about collaboration.

The most market-relevant breakthrough is the US government approval of NVIDIA H200 chip sales to 10 Chinese companies, a significant reversal from the prior semiconductor export restrictions. This move suggests the Biden-era China tech containment policy may be softening under Trump's administration. Jensen Huang's presence in Beijing itself was interpreted by markets as a positive sign for future China business. The offshore yuan posted its longest winning streak since 2017 in the session following the summit opening, reflecting investor appetite for Chinese assets and reduced geopolitical tail risk.

Capital flows have responded positively to the trade normalization narrative. Emerging-market stocks rallied for a third consecutive day as Taiwan and South Korean tech peers benefited from euphoria about reduced trade tensions. China renewed import permits for hundreds of US beef plants, and both sides discussed energy deals, with Xi allegedly interested in more US oil to reduce Middle East reliance. Energy importers gain margin relief if the Iran war premium compresses; energy exporters and defence contractors face potential headwinds.

The sceptical view warns that optics mask structural tensions. Xi's later warnings about Taiwan being a red line and the ongoing Iran conflict complicate any lasting thaw. Further, approval of H200 sales may face domestic political pushback in the US Congress, and the summit could be primarily theatrical. If trade tensions reignite after the summit buzz fades, the yuan could reverse sharply and risk-on positioning could unwind.