(Reuters) -Global companies have a long list of concerns around the U.S.-China trade war. They will closely monitor President Donald Trump and Chinese President Xi Jinping’s expected meeting in South Korea on Thursday, hoping that the world’s two biggest economies begin to resolve their differences.
Below are the biggest issues for global companies.
SEMICONDUCTORS
The U.S. semiconductor industry will closely watch the talks for indications of a deal over whether U.S. firms can sell powerful artificial intelligence chips to China. While Nvidia is the market leader, Advanced Micro Devices and Intel are trying to gain market share, and a raft of other chip companies from Broadcom to Marvell Technology that help develop AI chips will feel the impact. Also critical will be discussions over critical minerals and materials, which affect chip manufacturers such as Intel and GlobalFoundries. Those materials have become a flashpoint in the tussle between the U.S. and China over Chinese access to the tools needed to build out its own semiconductor manufacturing industry. Those tools come from U.S. firms such as Applied Materials, Lam Research and KLA.
PHARMACEUTICALS
China is an important manufacturer of both finished pharmaceutical products and key ingredients of drugs used in the U.S.
In 2024, China was the eighth-largest exporter of pharmaceutical products to the U.S., accounting for more than 3.5% of those products imported for the year, according to U.S. trade data.
More importantly, China is the largest manufacturer globally of the key building blocks used to make pharmaceutical ingredients. According to a report published earlier this month by U.S. Pharmacopeia, China is the sole supplier of over 40% of the key starting materials for U.S.-approved pharmaceutical ingredients.
The top Chinese drug companies include Shanghai Fosun Pharmaceutical, WuXi AppTec, CSPC Pharmaceutical Group and Sinopharm Group.
ENERGY
U.S. energy companies, particularly LNG exporters including Venture Global LNG and Cheniere Energy, will be paying close attention to see if the Trump-Xi meeting can restart frozen energy flows after China levied a 15% tariff on American LNG in February.
China had been a major buyer before that, purchasing nearly 6% of U.S. exports of the fuel in 2024. Since the tariffs were imposed, Chinese companies have not signed any new long-term supply deals with U.S. LNG producers, and the country has been diverting U.S. cargoes to the European market in a move that has tempered global prices.
The U.S., meanwhile, has not exported any oil to China since February, when a 10% tariff was also imposed on crude. Exports to China totaled only about 4% of American shipments abroad – about 150,000 barrels per day – in 2024, down 42% from the previous year.
Top exporters of U.S. crude to China have previously included Occidental Petroleum; Unipec, the trading arm of China’s Sinopec; and Atlantic Trading & Marketing, an arm of French oil major TotalEnergies, according to shipping flows data from Kpler.
SOFTWARE
A wide range of global companies will be watching to see if the Trump administration intends to follow through on a plan to curb an array of software-powered exports to China. If implemented, it would make good on Trump’s threat earlier this month to bar “critical software” exports to China by restricting global shipments of items that contain U.S. software or were produced using U.S. software. It could disrupt global trade, given that many items are made with U.S. software, like jet engines from General Electric, or cars from companies like Toyota that use software in safety features. Chips worldwide are also produced with U.S. chip-design software from Cadence Design Systems and Synopsys.
AUTOMAKERS
Carmakers have much riding on the geopolitical dynamics between Trump and China, including a slate of still-unresolved tariffs between the two countries. Most pressing, though, is the threat of a shortage of chips from Chinese-owned firm Nexperia. China has banned exports of Nexperia’s finished products amid a dispute with the Dutch government. The inexpensive chips are used widely in car electronics, and automotive lobbying groups that represent Volkswagen, General Motors and Ford have warned of likely factory disruptions if the dispute is not quickly settled. China’s stepped-up export controls on rare-earth metals as well as battery materials and equipment also have raised fears among automakers and suppliers of production snags.
AGRIBUSINESS
Agribusinesses including Archer-Daniels-Midland, Bunge Global and privately held Cargill will be watching for any lifting of tariffs that have halted Chinese purchases of U.S. soybeans and other farm goods and driven crop prices to multiyear lows. Soybeans are the largest U.S. farm export by value, with $12.6 billion in shipments to top buyer China in 2024, according to U.S. government data. Farm equipment makers such as Deere, AGCO and CNH Industrial will also be eying any easing of duties that have hammered farmer income and chilled sales of tractors and combine harvesters.
AVIATION
Boeing faces rising pressure as Xi-Trump talks spotlight aerospace trade. Beijing’s push for domestic jets and retaliatory tariffs risk eroding Chinese demand for Boeing aircraft. With China historically a top market for Boeing, escalating trade tensions could threaten the company’s long-term growth. If Trump-Xi talks go well, Boeing could increase its access to China’s aviation market, but if they falter, the company risks deeper isolation. Meanwhile, Trump’s threat to restrict Boeing aircraft parts exports to China could disrupt the nascent jet production of state-owned Commercial Aircraft Corporation of China, which relies on U.S.-made engines and avionics.
(Reporting by Karl Plume in Chicago, Stephen Nellis in San Francisco, Mike Erman in New York, Mike Colias in Detroit, Chris Sanders in Washington, Nathan Crooks in Houston and Joe Brock in Los Angeles; Editing by Matthew Lewis)
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