Trump Visit To China: Trade/Taiwan and Iran
• The main success of Trump’s visit will be on trade, where an extension of October trade truce is likely. China wants to avoid section 301 tariffs that could increase the current effective tariff of 25% and the U.S. will turn the whole visit into a PR victory for Trump to deflect from Trump troubles elsewhere. A comprehensive trade deal remains unlikely however, as China has been able to divert export to other countries to sustain total exports and wants to avoid U.S. numerical targets.
• Xi will also likely ask Trump for a new understanding on Taiwan. Privately this could see Trump either politely saying no (likely to be Rubio/Hegseth advice on the day) or deferring the matter for further discussion later in the year (this would be a partial victory for China).
President Trump is scheduled to visit China from March 31, in what could potentially be four meetings with President Xi in 2026 (Figure 1). What impact will it have?
Figure 1: President Trump and Xi Meetings 
Source: Continuum Economics
President Trump has been looking forward to his trip to China since the October U.S/China trade truce, as he sees historic parallel with Nixon trip to China and he has always said that he gets on with President Xi.
The visit provides a further reason for Trump to end the Iran war, as the war PR optics could overshadow the power and prestige he wants shown – our central scenario remains a multi-week war (here), though largely as Trump wants to get gasoline prices back down and also to avoid a prolonged war. China is also keen for an end to the Iran war this month, with reports that they have pressured the Iranian regime. China also imports the most oil through the Straits of Hormuz (4-5mln b/d), though has strategic and commercial oil reserves of 1200-1300mln barrels that it will likely start using and could last for a long period of time – though last week 5 year plans signalled China wants to increase this strategic reserve further.
The main success of Trump’s visit will be on trade, where an extension of October trade truce is likely. China wants to avoid section 301 tariffs that could increase the current effective tariff of 25% and China officials have noted they keep all their option open (i.e. threatening to restrict rare earth mineral exports again). A trade deal remains unlikely, as China has been able to divert export to other countries and sustain total exports (Figure 2) – net exports should also remain a positive contribution to GDP growth in 2026.
Figure 2: China Exports and Imports (% Yr/Yr 2mma)
Source: Datastream/Continuum Economics
The other big topic will likely be Taiwan. With Trump’s Venezuela and Iran adventurism, it is an ideal time for President Xi to once again ask for a new U.S. understanding on Taiwan long-term reunification with China. China stopped flying missions close to Taiwan from February 27 to March 11, which is pre Iran war and likely be designed to make discussion on Taiwan easier between Xi and Trump. This could involve Trump accepting that long term reunification could happen or asking the U.S. to drop its strategic ambiguity policy. However, reports from China suggest that the U.S. has not made high level preparations for the Trump/Xi summit, due to the Iran war; Cuba and Supreme court ruling against reciprocal tariffs. Treasury secretary Bessant is meeting China vice premier this weekend, but this is on trade. Even so, Xi will likely ask Trump for a new understanding on Taiwan. Privately this could see Trump either saying no (likely to be Rubio/Hegseth advice on the day) or deferring the matter (this would be a partial victory for China).