The Sino-US negotiations went surprisingly smoothly.
Let me first talk about the background: this is the first time that the two sides have sat down to talk face to face since Trump took office. This time it was not a video or a statement, but a closed-door meeting in Geneva. After two days of talking and more than 10 hours of consultation, we really came up with something.
The Chinese side has a very clear attitude: you have to withdraw the new tariffs, don't talk about the exchange conditions of fentanyl; you can't blindly command strategic resources such as rare earths; and technology, exchange rates, subsidies, etc. are all China's own decisions, and we don't accept your unilateralism. And we adhere to the WTO line and don't accept your "I have the final say" rules.
The US side initially said that the 145% tariff would be cut to 80%, and later there was a rumor that it would be 34%, but these were all media news, and it is hard to say whether they are true or false. However, the conditions they offered are still the same - they have to cooperate on trade balance and fentanyl issues, and they also want to have "reciprocal tariffs" to force China to make concessions.
The atmosphere of the negotiation was quite tense at the beginning, and no one wanted to give in first. But on the second day, the atmosphere was obviously relaxed. In the end, a result was achieved: "substantial progress" was made, and it was decided that He Lifeng and Bessant would lead the establishment of a long-term trade consultation mechanism. The US Treasury Secretary also said that it was "productive", which means that it was done, but the details were not disclosed.
US stock futures opened with a big rise across the board, the Nasdaq directly pulled up 1.5%, and the Chinese concept also took over. The China Golden Dragon Index had already gone wild last Friday.
As soon as the A-shares opened today, technology stocks ignited, especially in the areas of AI computing power and semiconductor equipment. Obviously, someone had ambushed them in advance.
Gold fell a little, and the risk aversion retreated; oil prices rose with demand expectations, and the logic was smooth.
The most critical thing is not how many details were discussed in this wave, but the attitude and framework. The fact that China and the United States can talk, and talk face to face, has changed the "decoupling deadlock" sentiment that the market was most worried about before. Even without the details, the fact that this situation can continue to move forward is a big boon for capital.
Now, the roots of the big bulls behind have been laid. It depends on how this consensus will be fulfilled, whether it is a long-term or sudden collapse. We just need to keep an eye on it.If you are still confused, you might as well follow us and eat meat every day.
