US-China summit to yield incremental and concrete progress, not grand bargain: Citi

The agenda of the upcoming US-China meeting is expected to span trade, artificial intelligence, and geopolitics, with incremental but concrete progress rather than a "grand bargain", according to Citi Research.

The bank believes the most likely deliverable is an extension of the trade truce, covering tariffs, rare earth export curbs, and agricultural and aircraft purchases, alongside progress on operationalizing the bilateral Board of Trade and Board of Investment agreed in May. 

The world's two largest economies could also set up a formal US-China AI dialogue to manage national security risks, as US Treasury Secretary Scott Bessent has signaled, Citi said.

The tariff truce is likely to be extended, with any additional US tariffs kept below China's 20 percent ceiling, Citi said.

The scope of export controls could expand to power/computing equipment, access to frontier AI models, and cloud access to advanced chips amid the fierce AI competition, Citi added.

Citi pointed out that further measures to exclude Chinese suppliers from US AI infrastructure on national security grounds could also feature.

Competition is likely to remain more pronounced than cooperation in the AI sector, with only a high-level consensus regarding AI governance cooperation to be reached during the meeting, according to Citi.

Besides, if the meeting yields a successful outcome, it's expected to pave the way for leader-level attendance at the APEC summit in Shenzhen between November 18 and 19, as well as the G20 in Miami that will be held on December 14 and 15, it added.

𝗗𝗼𝘄𝗻𝗹𝗼𝗮𝗱 𝗧𝗵𝗲 𝗦𝘁𝗮𝗻𝗱𝗮𝗿𝗱 𝗔𝗽𝗽 ↓