Trump-Xi summit to focus on fragile truce, energy trade

US President Donald Trump arrived in Beijing this week for a summit with Chinese President Xi Jinping -- a visit postponed from late March following the eruption of conflict in Iran. While the optics suggest a high-stakes diplomatic moment, expectations remain decidedly modest.

"It's designed to implement and sustain the truce agreed upon last year because I think the focus will be mostly on maintaining this fragile truce between the US and China," Daniel Kritenbrink, partner at The Asia Group, said in a webinar on May 12. "I don't expect to see any major, earth-shattering outcomes from this visit."

Wu Xinbo, executive director of Fudan University's Center for American Studies, expects Trump to continue playing the tariff card, but said Beijing now feels confident confronting the challenge and will not treat it as a major concern.

There are four oil-centric issues that could come up: the future of energy trade between China and the US, the war in Iran, the volatile situation in Venezuela and bilateral sanctions.

Energy trade

Among all these agendas, "increasing US energy product imports will be the easiest win for both countries," said Grace Lee, a senior analyst with S&P Global Energy CERA AltView. Given the low base of China's energy imports from the US, "significant" increases would be easy to achieve, she said, but this would need to come with progress on tariffs for imports to be commercially viable.

"There has been a long gap in US energy shipments to China, and the US would like to see itself resume a role as a major supplier," Jennifer Schuch-Page, managing principal with The Asia Group, said at the same webinar.