Reshma Kapadia

When Chinese leader Xi Jinping makes his first visit in a decade to the White House on Thursday to meet with President Donald Trump, the focus for both leaders will be preserving stability in a relationship beset by friction.

Beyond the optics, investors are focused on the fate of a fragile detente that expires Nov. 10. Tariff reductions and potential deals on agriculture, energy and artificial intelligence are in focus, as well as any signs of cooperation on AI and the war in Iran.

Trump is scheduled to greet Xi at the airport Wednesday, a move Beacon Policy Advisors describes as "unusual and symbolic, for Xi, who is highly conscious of visible demonstrations of peer status." After a closed-door discussion Thursday, Trump will host Xi at a state dinner with guests including Nvidia Chief Executive Jensen Huang, Google's Sundar Pichai and OpenAI's Sam Altman.

For Xi, a win amounts to reinforcing the image that his relationship with the U.S. is under control, says Arthur Kroeber, head of research at Gavekal. That will help Xi as he heads into next fall's 21st Party Congress, when he is expected to push for a fourth term, while China's economy is still sputtering. Trump, Kroeber says, realizes picking a fight with China is a no-win proposition, especially as midterms loom.

Few analysts see much substantial progress on the issues festering in the relationship, including China's support for Russia and Iran, restrictions by both sides on critical inputs from the other and China's increased military exercises in the South China Sea.

Much like the host of a family dinner party trying to keep tensions from overturning the dinner table, success will be preserving some semblance of stability that keeps escalatory measures at bay and allows for further meetings. An agreement to hold further talks on AI safety risks and a possible notification system would be an added plus.

Here are the three things that would get investors' attention.

Doubling Down on Detente

The two countries hit pause on a ratcheting up tariffs and tightening restrictions on U.S. access to critical minerals in South Korea in the so-called Busan agreement, which ends Nov. 10.

But tensions have been bubbling for months. U.S. companies have not been able to get the quantity of rare earths they want, feeding a view that Beijing isn't fully living up to the agreement. China sees the Federal Communications Commission's expansion of bans on goods made with Chinese inputs this summer as inconsistent with its idea of the detente.

The two also differ on the length of an extension. China wants a longer lasting truce through the duration of Trump's term, while the U.S. is looking for a shorter extension of six months or less, giving the administration flexibility to keep China to its commitments and future meetings on the table.

Any extension could allow investors to push U.S.-China tensions to the back burner of their concerns. But no extension could rattle markets, sparking fears of another round of escalatory tit-for-tat. "It's existential. It must be extended; otherwise, we won't see any more friendly leader-level meetings," says Kurt Tong, a former diplomat who is now a managing partner at geopolitical consultancy The Asia Group, speaking at a recent press briefing.

Lower Tariffs

The most concrete moves out of the summit could be trade-related, with discussions about a so-called Board of Trade potentially paving the way for lower tariffs on about $30 billion of nonstrategic goods on each side.

Veda Partners co-founder Henrietta Treyz says hundreds of product lines involving several hundred companies could be affected, lowering the effective tariff rate, which sits at 35% after including the duties since Trump's first term, to as low as 20%. Those reductions could target consumer-oriented goods, helping U.S. retailers. Treyz still expects the administration to conclude its Section 301 investigation into excess capacity in more than a dozen countries, including China, which is likely to produce tariffs of 7.5%-but likely not until after the midterm elections.

Lower U.S. tariffs on Chinese goods could hurt China's exporting rivals in Southeast Asia, Turkey and South America, so investors will pay close attention to where the rates ultimately level out.

Dealmaking

China is likely to commit to buy more U.S. goods, including agricultural products like sorghum, corn and wheat, possibly Boeing jets or liquefied natural gas in return for the lowered tariffs.

Trump has signaled openness to allowing Chinese investment in the U.S. and even permitting Chinese companies to make cars in the U.S. for sale stateside, but there's strong bipartisan pushback to both. U.S. auto groups last week sent a letter urging Trump to keep Chinese automakers such as BYD out. Any such deal would likely be met with bipartisan opposition and could weigh on shares of U.S. automakers while giving companies such as BYD a boost.

China's support for Iran also looms as an issue as Trump tries to end the war. While the Chinese want to see an end to a war that is now beginning to pinch their economy as well, Michael Swaine, a senior research fellow at the Quincy Institute, is skeptical they will get too involved.

"Trump is looking to have a successful visit and not looking to produce fireworks that end in a broken meeting and Xi pushing back. He may urge the Chinese to restrain their support and say you need to help," Swaine says. "But I don't see them doing more than exercising persuasion to tell Iranians that there must be a middle ground."

Taiwan could be another flashpoint. The issue featured prominently in the last summit in May, after which Trump signaled he may be willing to use $14 billion in weapons sales to Taiwan as a bargaining chip. Xi is expected to press Trump again on arms sales during this week's meeting. Analysts have expected the pending sales to be delayed or slowed, but any broader shift in U.S. policy or the carefully calibrated language around Taiwan would raise alarms.