This round of negotiations between China and the United States indeed exceeded expectations, especially considering the previous tense standoff. Specifically:

The negotiation background is quite special.

This is the first time the two countries have sat down face-to-face since Trump took office again. Previously, it was all video calls or shouting across distances. This time, they held a two-day closed-door meeting in Geneva, Switzerland, talking for over ten hours straight. The result was that they actually made some progress—both sides claimed to have achieved "substantive progress" and agreed to establish a long-term consultation mechanism, led by He Lifeng and Bessenet.

Both sides did not budge on their bottom lines.

The Chinese side's stance is very firm: the new tariffs must be withdrawn, strategic resources such as rare earths cannot be touched, and there will be no concessions on domestic issues like technology and exchange rates. The U.S. side, while calling for reducing the 145% tariffs to 80% or even 34%, still follows the old routine of demanding concessions from China on Finland and trade balance. However, this time neither side flipped the table; instead, they established communication channels, which is considered a significant breakthrough.

Market reactions were very honest.

Once the news broke, U.S. stock futures soared, with the NASDAQ rising 1.5%, and Chinese concept stocks followed suit. A-shares opened with a collective surge in technology stocks today, with clear preemptive capital in sectors like AI computing power and semiconductors. The offshore RMB appreciated, gold prices fell, and oil prices rose, indicating a return of market risk appetite.

The key lies in the framework breakthrough.

In fact, the specific number of terms discussed is not the focus; the key is that both sides are willing to sit down and talk. Previously, the market was most afraid of a complete decoupling between China and the U.S.; now this consultation mechanism acts like a safety valve. Even if progress is slow in the future, at least the communication channels are open. Japanese experts have said that just this mechanism can keep the stock market excited for two days.

The next step will depend on implementation.

Everyone is now focused on the joint statement to be released today, looking at the specific tax reduction extent and timetable. However, Trump's unpredictability means he could turn against them again at any time. But at least in the short term, the most panicked phase of the market has passed, and large funds are willing to enter. As analysts said, we can be moderately optimistic, but don’t get carried away.

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