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U.S.-China Talks Seem Successful: ETF Areas in Focus
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Key Takeaways
U.S.-China trade talks could lift semiconductor, retail and auto ETFs.
SMH, XLK, XRT, RTH and CARZ may benefit from easing trade tensions.
Trump-Xi talks put China-exposed technology, retail and auto ETFs in focus.
Investors are currently tracking developments ahead of an expected meeting between U.S. President Donald Trump and Chinese President Xi Jinping in Washington later this week. The meeting is expected to cover trade, artificial intelligence (AI) and broader geopolitical issues.
U.S. stock futures moved higher on Monday after Treasury Secretary Scott Bessent said Sunday that the latest talks with Chinese Vice Premier He Lifeng in New York had been a “very successful engagement,” as quoted on Yahoo Finance.
ETF Areas in Focus
Technology ETFs
Bessent said Sunday that trade and AI were among the topics discussed during the latest U.S.-China talks. The two countries have been negotiating reciprocal tariff reductions covering about $30 billion worth of goods from each side.
Trade, tariffs and AI safety are expected to feature prominently when Trump and Xi meet later this week. Note that semiconductor and semiconductor-equipment companies have significant revenue exposure to China.
Companies like Qualcomm (QCOM - Free Report) , Intel (INTC - Free Report) , Micron Technology (MU - Free Report) and Applied Materials (AMAT - Free Report) have solid exposure to China. This could support sentiment in the semiconductor space if the Trump-Xi talks produce progress on trade. The development could be particularly relevant given the importance of chips to the ongoing AI boom.So, VanEck Vectors Semiconductor ETFSMH could be in focus.
NVIDIA-Heavy ETFs
For NVIDIA (NVDA - Free Report) , a U.S.-China trade deal could have a more direct impact than for many other technology companies because AI-chip exports are a central issue in the bilateral relationship. Access to advanced chips could be a key point in the Trump-Xi discussions.
U.S. licenses currently allow limited H200 shipments to specific Chinese customers, but Chinese restrictions have prevented NVIDIA from selling all of its licensed inventory. H200 shipments represented less than 1% of Data Center revenue in NVIDIA's most recent quarter.
A broader agreement covering AI chips could help NVIDIA sell more competitive products in China, within the limit of national-security issue. This puts focus on NVIDIA-heavy ETFs like Strive U.S. Semiconductor ETFSHOC.
Apple-Heavy ETFs
Technology companies with extensive trade relations with China could benefit from easing trade tensions. Apple (AAPL - Free Report) has meaningful exposure to China on both the revenue and supply-chain sides, although it has been diversifying its manufacturing and sourcing.
A substantial portion of iPhones are assembled in China. Apple-heavy ETF Technology Select Sector SPDR Fund (XLK - Free Report) could therefore be worth watching closely.
Retail
With a large share of consumer goods from home appliances to toys sourced from China and Mexico, major retailers like Walmart (WMT - Free Report) , Target (TGT - Free Report) , Best Buy (BBY - Free Report) and Costco (COST - Free Report) are expected to see lower prices if negotiation in reciprocal tariff reductions takes place properly.
Retailers have previously been vulnerable to higher costs for consumer electronics and other imported goods. Hence, SPDR S&P Retail ETFXRT and VanEck Vectors Retail ETF RTH may benefit.
Auto
U.S. automakers maintain substantial business exposure to China, where they generate significant vehicle sales and operate manufacturing joint ventures, making them sensitive to changes in U.S.-China trade relations. First Trust S-Network Future Vehicles & Technology ETFCARZ would be in focus.
For instance, Tesla (TSLA - Free Report) has significant exposure to China, which is both a major sales market and a major manufacturing base through its Shanghai Gigafactory.
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U.S.-China Talks Seem Successful: ETF Areas in Focus
Key Takeaways
Investors are currently tracking developments ahead of an expected meeting between U.S. President Donald Trump and Chinese President Xi Jinping in Washington later this week. The meeting is expected to cover trade, artificial intelligence (AI) and broader geopolitical issues.
U.S. stock futures moved higher on Monday after Treasury Secretary Scott Bessent said Sunday that the latest talks with Chinese Vice Premier He Lifeng in New York had been a “very successful engagement,” as quoted on Yahoo Finance.
ETF Areas in Focus
Technology ETFs
Bessent said Sunday that trade and AI were among the topics discussed during the latest U.S.-China talks. The two countries have been negotiating reciprocal tariff reductions covering about $30 billion worth of goods from each side.
Trade, tariffs and AI safety are expected to feature prominently when Trump and Xi meet later this week. Note that semiconductor and semiconductor-equipment companies have significant revenue exposure to China.
Companies like Qualcomm (QCOM - Free Report) , Intel (INTC - Free Report) , Micron Technology (MU - Free Report) and Applied Materials (AMAT - Free Report) have solid exposure to China. This could support sentiment in the semiconductor space if the Trump-Xi talks produce progress on trade. The development could be particularly relevant given the importance of chips to the ongoing AI boom.So, VanEck Vectors Semiconductor ETF SMH could be in focus.
NVIDIA-Heavy ETFs
For NVIDIA (NVDA - Free Report) , a U.S.-China trade deal could have a more direct impact than for many other technology companies because AI-chip exports are a central issue in the bilateral relationship. Access to advanced chips could be a key point in the Trump-Xi discussions.
U.S. licenses currently allow limited H200 shipments to specific Chinese customers, but Chinese restrictions have prevented NVIDIA from selling all of its licensed inventory. H200 shipments represented less than 1% of Data Center revenue in NVIDIA's most recent quarter.
A broader agreement covering AI chips could help NVIDIA sell more competitive products in China, within the limit of national-security issue. This puts focus on NVIDIA-heavy ETFs like Strive U.S. Semiconductor ETF SHOC.
Apple-Heavy ETFs
Technology companies with extensive trade relations with China could benefit from easing trade tensions. Apple (AAPL - Free Report) has meaningful exposure to China on both the revenue and supply-chain sides, although it has been diversifying its manufacturing and sourcing.
A substantial portion of iPhones are assembled in China. Apple-heavy ETF Technology Select Sector SPDR Fund (XLK - Free Report) could therefore be worth watching closely.
Retail
With a large share of consumer goods from home appliances to toys sourced from China and Mexico, major retailers like Walmart (WMT - Free Report) , Target (TGT - Free Report) , Best Buy (BBY - Free Report) and Costco (COST - Free Report) are expected to see lower prices if negotiation in reciprocal tariff reductions takes place properly.
Retailers have previously been vulnerable to higher costs for consumer electronics and other imported goods. Hence, SPDR S&P Retail ETF XRT and VanEck Vectors Retail ETF RTH may benefit.
Auto
U.S. automakers maintain substantial business exposure to China, where they generate significant vehicle sales and operate manufacturing joint ventures, making them sensitive to changes in U.S.-China trade relations. First Trust S-Network Future Vehicles & Technology ETF CARZ would be in focus.
For instance, Tesla (TSLA - Free Report) has significant exposure to China, which is both a major sales market and a major manufacturing base through its Shanghai Gigafactory.