Trump-Xi Talks May Yield Tariff Cuts, But AI Chip Export Controls Unlikely

Jefferies analysts believe that the proposed Board of Trade is the 'single most possible deliverable' from Thursday's talks between Trump and Xi. This framework would oversee reduced tariffs across a range of goods, building on the tariff-cutting approach used since their meeting in Busan last October.

Under the plan, tariffs were cut to 47% from 57%, with China agreeing to ease rare-earth restrictions and resume soybean purchases. Jefferies analysts expect that Boeing (BA) and medical-device makers could benefit from renewed trade commitments, particularly if the talks reaffirm previous agreements.

Agricultural companies tied to soybean exports, including Archer-Daniels-Midland (ADM) and Bunge (BG), may also see support. U.S. energy exporters could also gain from the talks, but Jefferies analysts do not expect significant movement on semiconductors or rare earths.

Chipmakers with significant China exposure, such as Nvidia (NVDA), AMD (AMD), and Qualcomm (QCOM), may be left without an expected catalyst from the talks. Rare-earth producer MP Materials (MP) is also outside Jefferies' expected list of beneficiaries.