Trump-Xi Meeting Revives Trade Optimism: What It Means for Malaysia’s Market

Global Headline Recap

Global markets reacted positively to the highly anticipated meeting between U.S. President Donald Trump and Chinese President Xi Jinping, which took place in Busan, South Korea earlier this week. The meeting marked a turning point in the trade relationship between the world’s two largest economies.

Both leaders announced a one-year trade agreement that includes tariff reductions and commitments on key exports. The United States will cut tariffs on Chinese goods from an average of 57 percent to 47 percent, while China has agreed to ease export restrictions on rare-earth minerals and resume large-scale purchases of U.S. soybeans. These steps are designed to stabilize global supply chains and improve the flow of goods that have been disrupted since the trade conflict reignited earlier this year.

The two sides also reached an understanding on the control of precursor chemicals used in fentanyl production, which has been a major concern in the United States. President Trump described the discussion as “a 12 out of 10 meeting,” signalling his satisfaction with the outcome, while President Xi called it a “new chapter of pragmatic cooperation.” Although the agreement is limited in scope, it has successfully shifted the global narrative away from confrontation and toward renewed engagement.

Market Reactions and Key Takeaways

Global equity markets responded with optimism. Asian indices, including those in Japan and Hong Kong, traded higher as investors welcomed the easing of trade tensions. The U.S. dollar weakened slightly, while commodity prices rose in anticipation of revived demand for industrial goods and technology components. Rare-earth and semiconductor-linked counters were among the biggest gainers, reflecting confidence in improved global trade activity.

Despite the positive sentiment, analysts remain cautious. The agreement only lasts for one year, and deeper structural issues such as technology access, intellectual property, and enforcement mechanisms remain unresolved. Market observers noted that while the risk of a new trade escalation has subsided, uncertainties surrounding long-term trade policy and U.S. election rhetoric could limit upside potential.

For traders, the near-term message is clear: risk appetite has improved, and selective opportunities are emerging across export-driven sectors. However, positioning should remain tactical rather than overly aggressive.

Implications for the Malaysian Market

Malaysia is well placed to benefit from the latest developments. As trade flows normalise, sectors such as electrical and electronics (E&E), rare-earth components, palm oil, and industrial parts may experience improved demand. Malaysia’s established position in regional supply chains could make it a key beneficiary of the renewed U.S.–China trade activity.

Foreign investor sentiment may also strengthen in the short term as global funds reallocate capital to emerging markets that stand to gain from trade stability. The E&E sector, in particular, has continued to attract investment as multinational manufacturers pursue “China Plus One” strategies by diversifying production bases into Southeast Asia.

At the same time, investors should remain mindful of potential headwinds. The ringgit could face temporary fluctuations due to shifts in capital flows, while commodity-linked sectors remain sensitive to external price movements. Structural uncertainties, especially in the global semiconductor cycle, may still weigh on earnings momentum.

Among Bursa-listed counters, the sectors and stocks to monitor include:

• Technology and E&E: Genetec Technology Bhd, Unisem (M) Bhd, and Nationgate Holdings Bhd may benefit from renewed manufacturing orders and export demand.
• Logistics and Ports: Westports Holdings Bhd could see higher throughput as trade volumes pick up.
• Plantation: IOI Corp Bhd and Kuala Lumpur Kepong Bhd may gain from improved global commodity demand and trade access.
• Rare-Earths: Lynas Rare Earths, which operates in Malaysia, may benefit as the U.S. seeks supply diversification outside of China.

What Traders Should Do Now

For Malaysian traders, this is an opportune moment to reassess portfolios and position ahead of potential market rotation. Sectors with high export leverage and strong order visibility should remain on the radar. Investors can also take advantage of short-term volatility to accumulate fundamentally sound counters.

All of this can be done conveniently through Rakuten Trade’s platform, which allows traders to execute global and local trades seamlessly. By using Rakuten Trade’s research insights, clients can track top-moving stocks, identify sectors with rising foreign participation, and manage trades efficiently under current market conditions. The platform’s latest reward campaign also allows traders to earn while they trade, providing extra value at a time of heightened opportunity.

Conclusion

The Trump–Xi meeting has helped to lift global sentiment and reduce immediate geopolitical risk. While the deal remains limited and temporary, it signals a willingness by both sides to rebuild trust and re-establish trade cooperation. For Malaysia, this presents a window of opportunity to strengthen its role in regional supply chains and attract renewed investment inflows.

Traders should remain vigilant, focusing on companies with sustainable fundamentals and direct exposure to global trade trends. As always, Rakuten Trade’s research updates, webinars, and portfolio tools can help investors make informed decisions in response to fast-changing global dynamics.

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