US–China: Stability without convergence

Over the course of two days in May, the United States and China met in Beijing with a clear objective: to prevent tensions from escalating in a relationship that has become too important to fail, yet too contested to resolve. The meeting had been planned since late 2025 and was originally scheduled for early spring 2026, before being postponed due to escalation in the Middle East. What was initially framed as a re-engagement evolved into a pragmatic effort to manage geo-economic risk.

Set against a backdrop of mounting tensions, from conflict in the Middle East to rising pressure around Taiwan and intensifying technological rivalry, expectations for a breakthrough were limited. Instead, both sides focused on restoring a degree of predictability to an increasingly volatile relationship. The emphasis on what Beijing defines as “strategic stability” reflects a shared willingness to manage competition rather than attempt to resolve it.

As Eric den Boogert, Managing Director of Atradius in Asia, notes: “The recent US–China summit points to a phase of managed stability rather than any meaningful reset in bilateral relations. While both sides emphasised constructive engagement and agreed to maintain dialogue and existing trade frameworks, key structural issues such as tariffs, technology restrictions, and geopolitical tensions remain unresolved. Analysts across Asia note that the outcome is more symbolic than substantive, offering short-term reassurance to markets but limited clarity for businesses". 

Economic pressures shaping the agenda

The most tangible outcome of the visit is the resumption of high-level dialogue. As the first visit by a US president to China in nearly a decade, it signals a deliberate effort to re-establish direct engagement at the top of the relationship. The reactivation of political exchanges reduces the risk of miscalculation and reflects a shared interest in keeping communication channels open. This dynamic is further reinforced by Trump’s invitation for Xi Jinping to visit Washington later in 2026, pointing to a renewed cycle of sustained diplomatic contact.

This shift is closely linked to broader economic pressures. A weaker outlook, persistent inflation, geopolitical tensions and ongoing supply chain vulnerabilities have increased the cost of disruption for both economies. At the same time, critical dependencies, from energy and raw materials to advanced semiconductors, have become more exposed and politically sensitive.

In this context, both countries have strong incentives to preserve stability where possible. For the United States, this means securing energy stability and avoiding further shocks to trade flows. For China, the priority is maintaining access to key export markets.

A fragile stabilization

Both sides came to the table with markedly different approaches. The United States focussed on securing visible, short-term economic gains, including Chinese purchases of US oil and aircraft, as well as improved market access for American companies. This logic was reflected in the US delegation, which brought together around 17 top executives from sectors including technology, finance, aerospace and agriculture, underlining the administration’s focus on commercial gains and investment opportunities.

China, by contrast, adopted a more measured and strategic stance. Its priority was not headline agreements but avoiding further economic decoupling, making selective concessions while maintaining its position on core issues such as technology and industrial policy. This divergence naturally limits the scope of cooperation. Progress is possible in areas of immediate mutual benefit, but it does not extend to the structural factors shaping the relationship.

As Gordon Cessford, Regional Director of Atradius in North America, explains: “From a US perspective, the summit is largely viewed as an effort to stabilize rather than reset the relationship. The emphasis on ‘strategic stability’ and the establishment of new trade and investment channels suggest both sides are focused on putting guardrails in place, rather than resolving underlying structural tensions. For businesses, the outcome reinforces a shift towards more selective and managed engagement. While there are incremental gains in areas such as agriculture and aerospace, these are counterbalanced by ongoing restrictions and heightened competition in strategic sectors. As a result, companies are likely to treat the agreements as marginal improvements, continuing to diversify supply chains and reduce concentrated exposure to geopolitical risk”.

The outcome has drawn criticism for its limited substance. While the tone has improved and high-level dialogue has resumed, the underlying sources of tension remain firmly in place. There has been no meaningful progress on key issues such as export controls, industrial policy, technological competition or Taiwan, which remains the most sensitive flashpoint in the relationship. Broader divergences on security dynamics in Asia, geopolitical positioning and international conflicts also persist.

Although both sides have emphasized stability and continued engagement, and limited cooperation in areas such as trade and energy suggests a willingness to keep channels open, this should not be mistaken for structural progress. As a result, the summit reinforces an existing dynamic: selective cooperation alongside persistent strategic competition. It reduces short-term risk, but does not alter the direction of travel.

From geopolitics to trade credit risk

The summit should therefore be understood as a tactical de-escalation rather than a structural shift. Cooperation is likely to remain limited to areas of aligned interests, combined with a persistent and structural rivalry in technology, security and geopolitical influence. The risk of fragmentation in the trading system is likely to persist over the medium-term, with periods of renewed tension remaining a defining feature of the relationship.

This evolving dynamic has direct implications for credit risk. For businesses, this creates a more stable short-term environment, but not a less complex one. While immediate disruption may ease, regulatory divergence, supply chain realignments and shifting geopolitical priorities will continue to shape trade.

As Gordon Cessford adds: “In terms of credit risk, the near-term implications are modestly positive. A more predictable trade environment should help contain downside risks and support business confidence. However, the broader trend of trade fragmentation remains intact, suggesting a stable but cautious credit outlook, particularly for sectors with high exposure to cross-border trade, complex supply chains or policy-sensitive industries.”

This view is echoed in Asia. As Eric den Boogert notes: “For companies operating across Asia, this supports near term continuity in trade flows but ongoing uncertainty around supply chains and policy direction. As a result, businesses are likely to remain cautious, with continued focus on diversification and risk mitigation, which may in turn sustain pressure on payment behavior in more exposed sectors”.

In this environment, trade credit risk is increasingly influenced not only by company fundamentals, but also by the broader geopolitical and economic forces affecting the markets in which companies operate.

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