The Trump-Xi meeting gave practical direction to strategic trade between the two countries. The meeting signaled that both governments see a need to keep selected trade and investment channels open ahead of the 2026 midterm elections, especially in sectors where disruption carries direct political or industrial costs, including agriculture, rare earths, aviation and investment.
China’s rare earth-related exports to the US diverged across segments. Rare earth metals were the only segment to decline in 2024, while rare earth compounds and permanent magnets continued to grow. Permanent magnets remained the largest segment, reaching US$300.6 million in 2025.
Boeing’s China orderbook nearly disappeared after 2018. Boeing received only 61 orders from Chinese Mainland and Hong Kong, China from 2019 to 2025 before the Trump-Xi meeting, while Airbus recorded 897 orders from 2021 to 2026 YTD.
Two-way FDI has declined in scale and shifted in structure. Chinese FDI in the US has moved toward industrial sectors, while US net FDI flows to China remain mostly positive but have weakened in technology and finance.
In mid-May, President Donald Trump visited Beijing, marking the first official visit to China by a sitting US president since his own 2017 trip. In the nine years between the two visits, US-China competition moved far beyond the original tariff war. Trade disputes expanded into a wider contest over technology, investment, supply chains and industrial policy.
Although neither side released a full list of negotiated terms, the White House summary points to three areas of agreement. First, the two governments will establish a US-China Board of Trade to manage bilateral trade in non-sensitive goods and a US-China Board of Investment to discuss investment-related issues. Second, the two sides addressed specific trade items, including US agricultural products, Boeing aircraft, rare earths and critical minerals. Third, the meeting signaled that both governments are trying to manage the parts of economic competition that carry the most immediate political and industrial costs.
The following sections examine these sectors over the past decade, beginning with the first Trump administration. The goal is to show why trade talks matter now: not because US-China competition has ended, but because both sides have strong reasons to keep selected channels of trade and investment functioning before the 2026 midterm elections.
Agriculture might not be the highest revenue-generating sector, but losses surrounding agriculture carries significant political implications, given their differences with industrial products.
Unlike many manufactured goods, farm products are perishable, storage is limited, and producers often cannot wait out prolonged trade disruptions. At the same time, commodities such as soybeans, corn, and beef are highly substitutable, allowing China to shift purchases toward competitors such as Brazil, Argentina, and Australia when bilateral trade tensions rise.
Based on USDA data, a clear “Trump effect” appears in US agricultural exports to China. In the years when Trump is in office, both the value of US agricultural exports to China and China’s share in total US agricultural exports decline sharply. China is not a marginal market for US agriculture. At its peak, China took nearly one-fifth of total US agricultural exports and around half of US soybean exports. By 2025, however, US agricultural exports to China had fallen to just 22 percent of their 2022 level.
If China is buying less from the US, where is its agricultural demand going? To answer this, we focus on three products that were explicitly mentioned in White House meeting summary: soybeans, beef and poultry. These categories show how China’s import demand has shifted away from the US and toward alternative suppliers. Across all three products, the similar “Trump effect” consistently appears: US exports weakened during periods of Trump-era tariff escalation, while competitors such as Brazil, Argentina, Australia and Russia captured parts of the market that US exporters lost.
a. Soybean
Soybeans are one of the most important segments in global agricultural trade and the largest agricultural import category for China. At its peak in 2022, China imported more than US$60 billion in soybeans from global suppliers, led by Brazil and the United States. On the eve of the first Trump-era trade war, US soybean exports to China had nearly reached parity with Brazil’s, with the gap between the two suppliers narrowing to around US$2 billion. This gap became much more visible after 2018, when China’s retaliatory tariffs contributed to a 50 percent fall in US soybean exports to China in one year. The trend was partly reversed during the Biden administration, when US exports climbed to US$19 billion in 2022. By 2025, however, US soybean exports to China had fallen again to US$7.7 billion, roughly 40 percent of their 2022 peak, although still above their 2018 and 2019 levels. Much of China’s additional soybean demand has been captured by Brazil, consolidating its lead as China’s dominant soybean supplier.
b. Beef
For beef, both fresh or chilled beef (HS 0201) and frozen beef (HS 0202) are counted to more comprehensively capture China’s beef import market. Brazil remained China’s largest beef supplier throughout 2019–2025, rising from about one-quarter of total beef imports in 2019 to more than half in 2025. Argentina and Australia followed as the next major suppliers. The United States became a more significant source after 2020, with its share of China’s total beef imports staying around 10 percent from 2021 to 2024. This increase coincided with expanded market access under the US –China Phase One agreement and strong Chinese meat import demand after African swine fever disrupted domestic pork supply.
The US share was especially visible in the fresh or chilled beef market. While Australia remained the leading supplier in this higher-value segment, the United States became a major second supplier, accounting for roughly one-third of China’s fresh or chilled beef imports between 2021 and 2024. In 2025, as a result of China’s retaliatory tariffs toward US exports after Liberation Day tariffs, US beef exports to China fell by about 61 percent in total value, and by about 67 percent in fresh or chilled beef.
c. Poultry
China’s poultry import market is roughly one-quarter the size of its beef import market. Brazil remains China’s anchor poultry supplier, accounting for about 40 percent of total poultry imports in most years. This reflects Brazil’s position as one of the world’s leading poultry exporters. The United States was the second-largest supplier from 2020 to 2023, with its share reaching nearly 30 percent at its peak. Its exports to China, however, declined earlier than beef exports, falling by about US$547 million in 2024 and dropping further to US$75 million in 2025, only around 6 percent of the peak level. Meanwhile, Russia and Thailand have increased their poultry exports to China since 2018 and maintained a more stable presence through 2025. Overall, China’s poultry imports fell by more than 50 percent in 2025 compared with the elevated levels seen in 2022 and 2023.
Another heightened segment in US-China trade is rare earths. China holds roughly 49 percent of global rare earth reserves, but its stronger position comes from downstream control: it accounts for about 61 percent of global rare earth production and 92 percent of refining capacity.
Rare earth trade can be divided into three main segments: rare earth metals, rare earth compounds and permanent magnets.
Rare earth metals are refined materials used in aerospace components, high-strength permanent magnets and specialty steels, but this segment is much smaller than the other two in trade-value terms. China’s rare earth metal exports to the US peaked in 2021 at US$11.72 million. The largest decline occurred in 2024, when exports fell by US$5.59 million, or 75 percent, in one year, coinciding with China’s tightening of rare earth export controls. In 2025, exports rebounded to a level above 2019.
Rare earth compounds are chemical precursors used to produce rare earth metals, and are also used directly in petroleum refining catalysts, ceramics, optical glass and phosphors. Unlike rare earth metals, this segment did not decline during Trump’s first term. Instead, China’s exports to the US increased from the 2016 baseline and reached a peak in 2022. The category also did not see a major decline in 2025, falling by only about 20 percent from 2024.
The largest segment is permanent magnets. High-performance magnets, including neodymium-iron-boron magnets, serve as core components in electric vehicle motors, wind turbines, robotics and defense equipment. China’s permanent magnet exports to the US did not decline during Trump’s first term; they rose consistently through 2019 and continued upward until 2022. In 2025, China’s permanent magnet exports to the US were valued at US$300.6 million, far larger than the trade value of rare earth metals or compounds.
Civil aviation is another sector highlighted in the White House meeting summary. China’s approval of an initial purchase of 200 American-made Boeing aircraft for Chinese airlines is significant not only because of the size of the order, but also because aircraft procurement in China is rarely a purely commercial matter. Compared with many international markets, aircraft purchases by Chinese carriers are subject to centralized regulatory approval and broader policy coordination. This means that large aircraft orders can reflect airline demand, fleet renewal needs and the wider political context of US-China trade negotiations.
Boeing was once a major supplier to Chinese Mainland and Hong Kong, China, regularly receiving orders and delivering more than 100 aircraft a year before 2018. After 2018, however, new Boeing orders from the two markets fell to near zero, while deliveries also dropped far below pre-trade-war levels. Airbus moved in the opposite direction. From 2021 to 2026 YTD, Airbus recorded 897 aircraft orders from China and Hong Kong, China, including 420 orders in 2022, 166 in 2025 and 156 in 2026 YTD. Its deliveries also remained above 100 aircraft annually from 2021 to 2025. By contrast, Boeing received only 61 orders from 2019 to 2025 before the meeting, and its deliveries only began to recover in 2024.
The order is notable because it does not follow the commercial pattern since 2018, when Chinese aircraft demand shifted strongly toward Airbus. One possible explanation is that the order may be connected to China’s effort to pressure European Union Aviation Safety Agency (EASA) by limiting Airbus’s access to Chinese carriers. Although Airbus deliveries to Chinese airlines have remained strong, they still depend on final Chinese regulatory approval. The Civil Aviation Administration of China (CAAC) has reportedly delayed approval for some Airbus jets to enter China and enter service in recent months. This matters because China is seeking EASA certification for the domestically produced COMAC C919, a process EASA has suggested may take until around 2028. In this context, the Boeing order should be read not only as a commercial purchase, but also as part of a wider bargaining environment involving Airbus access to Chinese carriers and the C919’s path toward international certification.
Another explanation may also be linked to China’s need to secure key aviation components for the C919. Although the C919 is domestically designed and assembled, many of its core components still come from overseas suppliers. Its power source, the LEAP-1C engine, is produced by CFM International, a joint venture between GE Aerospace and France’s Safran. The same LEAP engine family also powers major narrow-body aircraft segments, including the Airbus A320neo family and the Boeing 737 MAX, which compete directly with the C919. In late May 2025, the United States briefly suspended exports of CFM International LEAP-1C engines to COMAC. Against this background, a big Boeing order may help stabilize the broader aerospace supply relationship and reduce the risk that engine access becomes a prolonged constraint on the C919 program.
In addition to trade in goods, the meeting also proposed two new institutional channels: a US-China Board of Trade to help the two governments manage bilateral trade in non-sensitive goods, and a Board of Investment to provide a government-to-government forum for investment-related issues.
The creation of these channels reflects growing frictions in both trade and investment. As China has advanced in higher value-added manufacturing, including automotive, batteries, semiconductors and solar panels, Chinese firms have faced both market and non-market barriers when operating or investing in the United States. Recent cases include Gotion and CATL’s investment in Michigan, as well as CRRC’s production of rolling stock for US public transportation systems. At the same time, American firms have also faced greater scrutiny in China, such as Meta’s proposed purchase of Manus had been blocked by the National Development and Reform Commission (NDRC). Together, these cases point to the need for formal channels to manage investment-related disputes before they become broader political conflicts.
The following data use Rhodium Group’s China Cross-Border Monitor and BEA statistics to examine two-way FDI between China and the United States over the past 10 years. The goal is to show how aggregate investment has changed since the start of gradual decoupling and geopolitical competition, and how sectoral patterns have shifted in response to changing economic conditions and regulatory pressures.
a. Chinese FDI in the United States, 2016-2026
Chinese foreign direct investment in the United States has changed significantly in both scale and sectoral structure over the past 10 years. At the aggregate level, China’s total FDI in the United States fell from a 2016 peak of US$56.4 billion to US$3.9 billion in 2025. The largest drop came in 2018, FDI flow reduced by 27 billion in one year. This not only reflect the start of the US-China trade war, but also Beijing’s tightening of so-called non-rational overseas investment in mid-2017.
The sectoral shift is significant. Before the decline, real estate and hospitality was one of the most visible destinations for Chinese FDI in the United States, alongside financial and business services. Entertainment-related investment was also significant, ranging from US$3 billion to US$5 billion annually before 2022. Since 2022, however, Chinese investment in the United States has shifted toward more industrial sectors, consistent with the broader Going Global pattern among Chinese enterprises. Industrial and manufacturing-related sectors, including automotive, energy, aviation and electronics, now account for a larger share of new Chinese investment, marking a shift away from earlier real estate-, finance- and entertainment-led flows.
b. American FDI in China, 2016-2026
In terms of American foreign direct investment in China, total US net FDI flows to China remained positive from 2016 to 2020, ranging from US$6.39 billion in 2018 to US$9.00 billion in 2020. The major break came in 2021, when total net flows turned negative at -US$1.18 billion. Flows recovered to US$7.44 billion in 2022, but fell again to US$4.14 billion in 2023 and US$5.13 billion in 2024, remaining below the 2020 level.
The sectoral pattern also changed. Before 2020, computers and electronics — a proxy for US investment in China’s technology sector — led the selected categories, accounting for nearly 40 percent of total net outflow transactions in 2018. By 2024, however, net flows into computers and electronics had fallen to US$0.27 billion, consistent with the broader trend of US-China technology decoupling and strategic competition. A similar weakening appeared in finance and insurance, where net flows turned negative in 2024. This suggests that American investors have become more cautious about expanding exposure to China’s technology and financial sectors. By 2024, US net FDI flows to China were concentrated instead in chemicals, a key manufacturing sector, and wholesale trade.
The trade and investment arrangements reached at the top-level meeting should be read not only as an attempt to stabilize bilateral commerce, but also as an effort to reduce domestic political exposure before the 2026 midterms. The sectors emphasized in the meeting — agriculture, civil aviation and rare earth-related supply chains — are not random. Each carries direct political or industrial significance for the Trump administration. Agriculture matters because tariff retaliation falls heavily on farmers in Republican-leaning and swing states. Boeing matters because aircraft orders support a major American manufacturer and its wider supplier base. Rare earths matter because Chinese export controls can affect advanced manufacturing, defense production and technology supply chains in the United States.
Among all sectors addressed, the agriculture sector is especially politically sensitive. Farmers, who suffer greatest impact from agriculture tariffs, remain an important voting bloc in key agricultural and swing states, including Iowa, Nebraska, Wisconsin, Minnesota, Kansas, and parts of Colorado. Blanchard et al. (2024) find that China’s tariffs on U.S. agriculture in 2018 imposed measurable electoral costs on the incumbent Republican Party in the midterm election that year. In seat terms, the study estimates that the trade war cost Republicans about 10 House seats. In key battleground counties where Trump had won roughly 40 to 50 percent of the vote in 2016, the Republican House vote share fell by 5.0 percentage points from 2016 to 2018; without retaliatory tariffs and related agricultural subsidies, the estimated decline would have been only 2.9 percentage points. When aggregated nationwide, the economic fallout from the trade war accounted for roughly one-fifth (1.0 percentage point) of the entire 5.0 percentage point decline in the Republican party's overall vote share between 2016 and 2018.
Latest electoral results in Iowa, an agriculture-heavy state typically positioned as point in a similar direction ahead of the 2026 midterms. In the 2026 Republican primary for governor of Iowa, Trump-endorsed Rep. Randy Feenstra lost to Zach Lahn, a rare defeat for a Trump-backed candidate in a major Republican primary this cycle. This is a clear indication that Iowan's dissatisfaction over agricultural conditions and the war with Iran contributed to the outcome, and carries national implications for states with similar economic and electoral identities.
In summary, for the Trump administration, making trade work before 2026 means limiting the channels through which bilateral conflict can translate into electoral losses at home. For China, these same sectors provide bargaining tools: agricultural purchases, aircraft orders, rare earth approvals and investment access can all be adjusted in ways that affect politically important US constituencies. The meeting therefore did not end US-China competition, but it showed how both governments are trying to manage the parts of competition most likely to create immediate political costs.
Director, Asia Global Institute
Research Assistant, Asia Global Institute
Room 326-348, Main Building
The University of Hong Kong
Pokfulam, Hong Kong