Trump and Xi are set to meet in DC. Why some China watchers have low expectations

• The summit occurs less than six weeks before U.S. midterm elections, with Trump's approval rating at new lows and consumer costs a top issue; the U.S. average tariff rate on China remains elevated at 36.5% as of July.
• Treasury Secretary Scott Bessent unveiled 'Operation Economic Outcast' to sanction Iran's enablers, but experts question how aggressively the U.S. will target Chinese institutions given risks of retaliation and jeopardizing trade relations.
• Key potential deliverables include agreements for future leader meetings and progress on unfinished items from the May Beijing summit, including China's purchase of 200 Boeing aircraft and $17 billion in U.S. agricultural products, plus proposed Board of Trade and Board of Investment initiatives.

Trump-Xi Summit Summary

Key Event: Chinese President Xi Jinping is scheduled to visit President Donald Trump in Washington on September 24, with a formal state dinner planned—only the second such honor in Trump's current term after Britain's King Charles III.

Main Issues:

Iran Sanctions Tensions: Treasury Secretary Scott Bessent unveiled "Operation Economic Outcast," targeting Iran's business partners with secondary sanctions. China, Iran's top trading partner, strongly opposes these measures, calling them "illicit unilateral sanctions." However, analysts believe the U.S. is unlikely to aggressively sanction Chinese institutions before the summit, with Bessent himself questioning why he would "blow up the global financial system."

Low Expectations: Analysts characterize this as a "low-expectations summit focused largely on managing the stalemate rather than resolving it." The relationship is described as producing "transactions without trust and stability without settlement." Trump's top-down dealmaking style, bypassing traditional diplomatic groundwork, further dampens expectations for concrete outcomes.

Economic Context: The summit occurs less than six weeks before U.S. midterm elections, with Trump's approval ratings at new lows amid persistent inflation concerns. U.S. tariffs on China remain elevated at 36.5% despite falling from peak levels.

Potential Deliverables: Expected outcomes include agreements for future leader meetings and progress on unfinished items from their May Beijing summit, including a proposed "Board of Trade," "Board of Investment," and a Boeing aircraft deal for 200 planes plus $17 billion in agricultural purchases.

Market Implications: The meeting represents efforts to maintain the fragile trade détente between the world's largest economies while managing multiple geopolitical challenges, including the ongoing Iran conflict and AI development discussions.