US-China trade truce faces test as Nvidia row clouds Trump-Xi summit

China and the United States head into a leaders' meeting on Thursday, November 12, with a yearlong trade truce set to expire in January. A controversy involving Nvidia has sharpened the debate over US limits on chip exports to China.

What happened

Chinese President Xi Jinping is welcoming US President Donald Trump. The truce between the world's two largest economies depends largely on the US pausing new restrictions on tech shipments to China.

A scandal involving Nvidia CEO Jensen Huang has given policymakers new arguments for further limits on China's access to advanced AI chips. It has also put offshore data-center hubs that supply restricted chips to Chinese customers under fresh scrutiny.

Sen. Tom Cotton wrote to Commerce Secretary Howard Lutnick. He asked the department to place the Chinese memory chip producer CXMT on its Entity List, a step that would greatly narrow the firm's ability to obtain American technology. He also warned against allowing the company's global expansion.

Beijing responded on the Nvidia matter. It said it has already made its position clear on the so-called spy narrative, and that China's technological progress is driven by self-reliant innovation. China warned the US against using the controversy as a pretext for tighter chip curbs.

Why it matters

Export controls on advanced chips link trade policy to technology policy. If Washington adds new restrictions, the truce renewal that depends on a pause could become harder to reach.

Other trade talks also face uncertainty. The US mid-term election results are unlikely to speed up an interim India-US trade agreement, because President Trump retains executive powers to impose tariffs. New Delhi also wants more clarity on the US investigation into excess industrial capacity.

Energy flows show another channel of geopolitical risk. The Centre for Research on Energy and Clean Air (CREA) said India was the second-largest buyer of Russian fossil fuels in October. Its purchases hit a record €6.4 billion, and Russia's fossil-fuel export revenues reached their highest monthly level since December 2022.

Separately, Chinese diplomats arrived in Lithuania for their first direct engagement since relations stalled over Vilnius's support for Taiwan. For investors, these decisions bear on trade costs, technology supply chains and energy prices.

What to watch next

The main focus is whether the Trump-Xi meeting produces a signal on extending the truce, and whether Commerce acts on the CXMT request. Any new US step on chip shipments would bear directly on the January expiry.

US data are also due. Initial jobless claims for the week to November 7 are scheduled at 13:30 UTC, with an estimate of 195 K against 189 K previously. Continuing claims are expected at 1710 K against 1718 K before.

At 15:00 UTC, existing home sales for October are due, with an estimate of 3.85 M against 3.99 M previously.