China, US Near Trade Deal: China to Invest $1T for Factories in US

• The United States and China are nearing a new trade deal, The White House announced over the weekend
• The US and China agreed on a $17B investment from China into US factories and to sell $200 Boeing Jets to China, fueling Boeing stock higher
• President Trump and President Xi Jinping will meet again at the White House this fall, the White House said

US President Trump and Chinese President Xi Jinping are reportedly close to a trade deal following the former’s visit to China last week. The White House this weekend revealed the trade deal and new developments following President Trump’s meeting with Xi last week, confirming several details. From views on Iran, to Boeing Air (BA) (a move that helped Boeing stock), to even rare earth supply chains, here’s everything that was covered and is expected to be formally announced this week.

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Trump Got $17B and 200 Boeing Jets From China as Xi Heads to Washington

The US and China trade deal will include several provisions. Most notably, China will be permitted to invest $1 trillion to build factories in the United States, with the former committed to buying at least $17 billion per year of U.S. agricultural products through 2028. Additionally, President Trump and President Xi chartered two new institutions to optimize the bilateral economic relationship: the U.S.-China Board of Trade and the U.S.-China Board of Investment. In return, the US reportedly approved Nvidia (NVDA) H200 chip sales to China.

According to the White House, The Board of Trade will allow the United States Government and the Government of China to manage bilateral trade across non-sensitive goods. The Board of Investment will provide a government-to-government forum for discussing investment-related issues. “President Trump and President Xi agreed that the United States and China should build a constructive relationship of strategic stability on the basis of fairness and reciprocity,” the White House said on Sunday. 

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Furthermore, Trump and the White House announced that China approved an initial purchase of 200 American-made Boeing (BA) aircraft for Chinese airlines. The purchase marks China’s first commitment to purchase American-made Boeing aircraft since 2017, and will “drive high-paying, high-skilled U.S. manufacturing jobs and enable the Chinese people to fly on American-made planes for decades to come,” per the White House. Boeing stock (BA) is down 1.4% on Monday, and a further 8% in the last week. However, the deal, once confirmed, could provide the airliner a much needed boost.

Other Notes from the US-China Trade Deal

Outside of the Boeing (BA) deal that fuels Boeing stock higher, and agreement for China to build in the US, the two countries also agreed they should continuing building their strategic relationship. President Trump will reportedly welcome President Xi for a visit to the White House this fall, and the pair will work together ahead of this year’s G20 summit.

China also supported the United States’ work regarding the Strait of Hormuz, according to the White House. China agrees that Iran cannot have a nuclear weapon, calling for the country to reopen the Strait of Hormuz. Both nations also agreed that North Korea cannot have a nuclear weapon either, and alluded to working together on preemptive measures to halt North Korea from using weapons.

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