U.S.-China Talks Focus on Limited Trade Gains

That approach matters because it suggests the world’s two largest economies are trying to lower friction without dismantling the broader architecture of confrontation. Washington still wants to reduce its trade deficit with China, which Greer said narrowed to $202.7 billion last year, the lowest in several years, while keeping export controls in place on advanced U.S. technology for national security reasons.

For investors, the message is less about a grand thaw than a controlled de-escalation. That tends to support sentiment in China-sensitive shares and exchange-traded funds, even if it does not erase the structural risks tied to tariffs, semiconductors, rare earths and artificial intelligence restrictions.

Chinese equities with heavy U.S. policy exposure were firmer on the day. The FXI China large-cap ETF rose 1.52% to $35.88, while the KWEB internet ETF gained 2% to $26.05, helping offset earlier weakness. Apple shares slipped 2.5% to $319.97 after touching a recent high this week, while Nvidia and AMD remain exposed to any tightening or easing in export rules, according to recent filings.

The backdrop is still fragile. Washington has added new sanctions tied to Iran that also hit Hong Kong-based and Chinese firms, while Beijing has warned against interference in its cooperation with Tehran. Even so, Greer’s comments point to a market narrative of incremental progress, not a reset, with the Xi-Trump meeting likely to test whether the two sides can extend their existing trade truce into agriculture and limited tariff relief.

The next catalyst is the Xi visit itself. Any announcement on farm purchases, non-tariff barriers or tariff exemptions would likely lift China proxies and industrial names with supply-chain exposure, while a lack of concrete progress could quickly pull sentiment back toward caution.