A high-stakes US-China summit next week is putting global investors on alert, with ripple effects expected across industries from rare earths and defense to agriculture and emerging markets.
As geopolitical tensions rise and markets brace for volatility, all eyes are on how the Trump-Xi meeting could reshape the global economic landscape. US President Donald Trump is set to embark on a three-nation Asia tour beginning October 26, which includes stops in Tokyo, Malaysia, and South Korea.
His meeting with Chinese President Xi Jinping is expected to be the highlight of the trip, coinciding with major regional summits — the Association of Southeast Asian Nations (ASEAN) in Malaysia and the Asia-Pacific Economic Cooperation (APEC) forum in South Korea. The White House views this tour as an opportunity to strengthen US alliances in the Indo-Pacific region, while investors see it as a potential turning point for global markets.
Market Outlook: Calm or Chaos?
A successful Trump-Xi meeting, as President Trump has predicted, could inject calm into global markets, reviving appetite for risk assets like Asian equities and regional currencies closely linked to China’s economy. However, a failure to find common ground could trigger renewed market volatility and a sharp sell-off in emerging market assets.
“The Trump-Xi meeting could serve as a stabilizing milestone,” said Xingchen Yu, Emerging Markets Strategist at UBS Global Wealth Management. “This environment supports a strategy of using market dips as buying opportunities, especially in sectors with strong structural and cyclical growth drivers such as China tech, India, Brazil, and broader EM equities.”
1. Rare Earths: Critical Minerals Take Center Stage
Rare earths are once again emerging as a flashpoint in US-China trade relations. Ahead of the summit, Trump identified rare earths, fentanyl, soybeans, and Taiwan as top issues. The US president is expected to pursue critical mineral agreements with trading partners during his trip to secure supply chains and boost domestic investments.
China currently controls around 70% of global rare earth supply, which is vital for producing advanced weaponry, computer chips, and electric vehicles. Tensions flared earlier this month after Beijing introduced new export restrictions, leading to strong rallies in mining stocks such as China’s JL Mag Rare-Earth Co. and Australia’s Lynas Rare Earths Ltd.
2. Defense Stocks: Taiwan Issue Looms Large
The Taiwan question remains the most sensitive issue in US-China relations. Any escalation or provocative rhetoric during the Trump-Xi summit could have a direct impact on regional defense and military-related stocks, especially in Japan, South Korea, and China.
Investors have already priced in rising geopolitical risk: Hanwha Aerospace Co. of South Korea has seen its shares surge more than 200% this year, while Japan’s Mitsubishi Heavy Industries Ltd. has nearly doubled. Renewed tensions could further fuel demand for defense sector stocks across Asia.
3. Transshipment and Tariffs: Southeast Asia in Focus
As the ASEAN summit unfolds, Washington’s proposed 40% additional tariff on goods deemed “transshipped” through Southeast Asia is another key topic to watch. The policy aims to prevent Chinese products from bypassing US tariffs by being rerouted through countries like Vietnam or Malaysia.
Despite the risk of higher tariffs, Vietnam’s stock market has gained over 33% in 2025, supported by optimism about capital market reforms and potential upgrades to its market classification.
4. Soybeans: A Political and Economic Commodity
Among the most politically sensitive issues in the upcoming talks is soybean trade. Prices for the global benchmark in Chicago have jumped nearly 5% in the past two weeks, amid speculation that the US will push China to resume large-scale soybean imports. The rally has also lifted prices of related commodities like wheat and corn.
The upcoming Trump-Xi summit is shaping up to be a defining moment for global markets and trade relations. From rare earth supply chains to soybean exports and defense sector momentum, the meeting’s outcomes could ripple across economies and asset classes worldwide. Whether the summit delivers stability or sparks new tensions, one thing is clear: investors will be watching every move closely.
Helene Elliott is the senior reporter for News Raise. She covers Science news. She also has a keen interest in photojournalism. Helene holds a nomination for the prestigious Red Smith Award. She is married to author Dennis D’Agostino, a former publicist with the New York Mets.
