Beijing warns US arms deals with Taiwan may cancel Trump-Xi summit

Beijing has issued a warning to Washington that recent U.S. weapons deals with Taiwan could jeopardize a planned summit between Chinese President Xi Jinping and U.S. President Donald Trump. This latest development adds to the long-standing tensions between the U.S. and China over Taiwan, a self-governed island that China considers a breakaway province. The arms sales have historically been a sensitive issue for China, leading to heightened diplomatic pressure whenever they occur. The possibility of canceling high-level talks underscores the potential for further strain in U.S.-China relations. The market reflects this uncertainty, with a notable decrease in confidence that Xi Jinping will visit the U.S. before 2027. Key Takeaways Market pricing suggests increased skepticism about Xi Jinping visiting the U.S. before 2027 following Beijing’s warning. The probability of Xi’s visit before September 24 has notably dropped, reflecting heightened diplomatic tensions. Market participants appear to interpret the arms sales as a significant obstacle to improving U.S.-China relations. What to Watch The focus will be on any official statements from Beijing or Washington that could either escal...