Markets had priced in a stabilizing US-China relationship ahead of a September Trump-Xi meeting, but fresh allegations add friction risk.
President Trump’s new election-interference accusations against China have introduced fresh uncertainty into US-China trade relations, unsettling markets that had anticipated a stabilizing dialogue ahead of a planned September meeting with Xi Jinping. The AUD, a proxy for China-linked risk, has already weakened in response.
The allegations, which include claims of China illicitly acquiring 220 million US voter files, contradict a 2021 US intelligence assessment finding no evidence of Beijing altering the election. While China’s embassy denied the accusations and the underlying intelligence appears disputed, the rhetoric alone risks complicating diplomatic efforts to solidify the existing trade truce.
Markets had been counting on the Trump-Xi meeting to consolidate gains from last year’s tariff ceasefire, but the new friction could delay progress or reignite tensions.