$ETH Market Watch: Surprising Positives from US-China Trade Tensions

Even with US-China trade tensions heating up again, the markets are reacting better than expected.

President Trump made it clear he’s not planning to lift tariffs on Chinese goods unless the US gets some real concessions. But here’s the twist—China is actually easing up a bit. Reuters reports that Beijing is removing some US products from its heavy 125% tariffs. It looks like they’re trying to ease the burden on their own businesses.

On top of that, China’s Ministry of Commerce has set up a special team to figure out more goods that could be tariff-free and is even asking local companies to suggest items they want added to the list. It’s a sign that China might be open to more flexibility in trade talks.

This development signals a potential de-escalation in US-China trade tensions, which the financial markets often interpret positively. Despite President Trump’s firm rhetoric, China’s measured response—especially the creation of a task force to review tariff exemptions—suggests a willingness to stabilize trade relations.

For short-term financial markets, such moves typically foster optimism, as they reduce uncertainty and hint at improved trade flows. Investors might respond with increased risk appetite, lifting equities—particularly in export-sensitive sectors—and potentially strengthening the yuan and commodity prices tied to Chinese demand.