A major US arms-sales package for Taiwan is in limbo following pressure from Chinese President Xi and concerns among some in the Trump administration that greenlighting the weapons deal would derail US President Trump’s coming visit to Beijing, via WSJ

• Arms sales are working their way through the administration’s internal process.
• US official says Trump aims to preserve trade relationship with Xi, timing of arms sales decision under careful consideration.
• Trump’s advisers are vacillating on the decision, according to a US official familiar with the arms package, who insisted that, while Xi was adamant, Trump wouldn’t be pushed around by China.
• Trump wants to preserve a trade truce with Xi, a second US official said, so the timing of an arms-sale decision is being carefully considered behind the scenes.
• Beijing’s primary objective is stability through a “truce extension” that moves beyond the current one-year trade framework, according to people close to the Chinese government. Chinese negotiators are likely to push for a rollback of existing tariffs and a reprieve from the export controls on advanced AI chips that have throttled China’s tech sector.

The uncertainty surrounding the US arms sales package to Taiwan highlights the delicate balance in US-China relations, particularly as President Trump seeks to manage trade tensions ahead of his visit to Beijing. If the arms deal is delayed, it could ease immediate frictions but may also weaken US standing with Taiwan, while potentially emboldening China in the region. Traders should watch for any shifts in market sentiment regarding US equities and currency pairs, especially with the geopolitical backdrop influencing risk appetite.