#TradeWarEases

The US-China trade war seems to be easing, with high-stakes tariff talks underway in Geneva aimed at de-escalating tensions between the two economic giants. Here's the latest:

- *Talks Underway*: US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer are meeting Chinese Vice Premier He Lifeng in Geneva to discuss reducing tariffs and finding a mutually beneficial solution.

- *Tariff Reductions*: Both sides are under pressure to scale back tit-for-tat levies, with China having responded to Trump's tariff hike with 125% duties on US imports, effectively freezing bilateral trade.

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

- *Challenges Ahead*: Despite optimism, expectations for a breakthrough are low, and analysts believe that reaching a deal will be challenging due to the complexity of the issues and the geopolitical relationship between the two nations.

- *Potential Outcomes*: A potential 90-day truce could see both countries slashing tariffs on each other's goods, similar to a previous agreement announced between the US and Britain ¹ ².

Some key concerns and predictions from analysts include ²:

- *Volatility*: Markets are expected to remain volatile, with the Cboe Volatility Index hovering above its long-term median.

- *Deal Likelihood*: Some analysts doubt that a "grand compromise" will be reached soon, given the depth of grievances on both sides.

- *Economic Impact*: A prolonged trade war could negatively impact US growth, with weak consumer sentiment surveys raising concerns.