#TradeWarEases The US-China trade war appears to be easing, with recent talks between the two nations showing promising signs of progress. Here's what's happening¹ ²:

- *Talks in Geneva*: US and Chinese officials held meetings in Geneva, with both sides reporting "substantial progress" and "important consensus". The talks aim to defuse the trade war sparked by Donald Trump's 145% tariffs on Chinese imports.

- *Potential Trade Deal*: Officials close to the White House suggest a historic trade deal is imminent, which could revive America's timber trade with China, among other benefits. China was previously responsible for buying 40% of US hardwood and 38% of US softwood exports.

- *Market Reaction*: Investors are hopeful that the talks will ease trade tensions and reduce uncertainty in financial markets. The S&P 500 stock index has already erased losses from the aftermath of the tariffs announcement on April 2.

*Key Challenges*

- *Tariffs*: The US had imposed 145% tariffs on Chinese imports, while China raised levies on US imports to 125%. A potential deal might involve reducing these tariffs.

- *Geopolitical Relationship*: The US-China relationship is complex, and trade ties are entangled with geopolitical issues, making negotiations challenging.

*Expert Views*

- *UBS's Alejo Czerwonko*: Describes the negotiations as "the mother of all negotiations" with hundreds of billions of dollars of trade on the line.

- *Macquarie's Thierry Wizman*: Believes a "grand compromise" is unlikely in the short term.

- *BCA's Matt Gertken*: Advises "selling on strength" due to potential market volatility.