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The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
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Sign InIn a move reflecting a shift toward diplomatic de-escalation with Beijing, President Trump has decided against a phone call with Taiwanese President Lai Ching-te before Xi Jinping's upcoming US visit. According to reports, a massive US arms package to Taiwan, estimated at $14 billion, has been put on pause as Washington seeks to avoid a 'dangerous situation.' This development follows a US tour by Taiwan's opposition leader Cheng Li-wun after her recent meeting with the Chinese President.
The suspension of the arms deal comes at a sensitive time for the global defense sector, where major contractors like Lockheed Martin and Raytheon rely on international contracts to bolster margins. Compared to last year, US arms sales to Taiwan had seen significant momentum, but the current pivot suggests a prioritization of political stability over short-term commercial gains. Per market data, investors are closely monitoring defense sector stocks which may face headwinds from the deferral of these substantial orders.
Regarding economic indicators, US GDP growth was recorded at 1.6% for the latest quarter (as of May 28, 2026), providing the administration with some political maneuvering room. Traders are now looking forward to upcoming Core PCE Price Index data to gauge inflation levels. Geopolitical developments in the Taiwan Strait will remain a primary driver for risk appetite in both Asian and US markets over the coming weeks.