China Morning Missive (Part II) The meeting has concluded and the details are now beginning to trickle out. What follows is nothing more than a quick reaction Note. As with everything China related, better to let events marinate a bit before jumping to any firm conclusions. First off, the fact that Trump jumped into his limo and went straight to Airforce One for a return trip to Washington was a surprise. I expected some sort of photo op and a press conference albeit held by Trump alone. To the latter point, that now seems to be underway but taking place on the plane. In terms of the meeting itself, it would look as though the outcome met with the broad expectations. The two Presidents ended up just discussing various issues while agreeing on only those few items which had already been reported on. My overall take is that China is holding firm on its overall position. Remaining firm, but also willing to concede on issues so long as the Americans fully reciprocate. The definition of quid pro quo. Critically though, Trump did not get his deal. I suppose, overall, that would be the main takeaway. It would also demonstrate just how great the leverage held by China is at the moment. Specific “asks” had already been made by China during the various bilateral trade talks. “Aggressive asks” as Sec Bessent noted during the Madrid round of talks. It stands to reason that these “aggressive asks” laid at the center of the meeting between Trump and Xi and the two men left with neither willing to give ground. Taiwan would have been one of those issues and I would expect the lifting of certain export controls by the United States was another such ask. Less about the Blackwell chips and more about China seeking the purchase critical machinery (ASML) to continue its own path towards chip production. Finally, going into the meeting Trump posted on social media that he had instructed his team to being a nuclear weapons testing program. China was specifically identified in that post. Additionally, and at roughly the same time, the Indo-Pacific command issued an order for a “show of force” in the South China Sea with the aim of thwarting Chinese “aggression”. No question that these two moves would have complicated the overall meeting. What does all this mean? No firm answers at this time. What should be expected though is more of the same. More bilateral meetings and that then means more stresses and more volatility.