Did the China-US meeting in Switzerland make a "significant progress"? Don't be fooled by the title! To put it bluntly, China and the US have gone from "never seeing each other again" to barely being able to chat!
To me, this so-called breakthrough is like breaking the ice - the US has reduced its tariff from an outrageous figure of 145% to 30%, and China has reduced it to 10%. Does it seem like a concession? In fact, the US tariff is still at a historical high! China has long been the backbone of the global supply chain. No matter how big the US pretends to be, it has to bow its head and negotiate. Now, it is finally willing to look at us straight in the eye!
Here comes the point! Now the China-US tariff negotiations have entered the "normalization" stage, just like a couple starting to reason after a quarrel. In the short term, safe-haven assets and the stock market will jump wildly, but the long-term macroeconomics will continue to move forward! Tariffs will not cause big waves in the future, and the market has long been numb!
The next battle is the real deal! China holds the vital points of the United States, such as agriculture (soybeans and corn), automobiles (Ford and Tesla), and energy (natural gas and crude oil); the United States holds the weak points of China, such as chips, machinery manufacturing, and rare earths. To put it bluntly, it is a matter of pinching each other's seven inches to see who can't hold it first!
In my opinion, there is still a long way to go in the negotiations! China's entire industrial chain is here. The United States wants to suppress it with tariffs? No way! But want to completely solve the trade problem? Wait and see!
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