Did the China-U.S. negotiations exceed expectations, leading the market to feel that good news has been fully priced in, resulting in a pullback and a turn to bearish?
To address this question, we can study it in detail.
Regarding the tweet, M has mentioned multiple times, the rapid rise of #Bitcoin before the China-U.S. negotiations was not due to large amounts of outside capital flowing in, but related to internal funds and market sentiment, which is also very consistent with my previous data. Overall, the market hasn't turned bearish; rather, it is brewing in a bullish phase.
Additionally, the following points can also be focused on:
1⃣ Why did the tariff war calm down so quickly?
2⃣ Has the China-U.S. economic and trade crisis been resolved?
3⃣ Political and cultural related influences.
4⃣ What is Trump's long-term strategy with his think tank?
One, why has it calmed down so quickly?
On the e-commerce platform Shein, the prices of some products skyrocketed by about 377%. On TikTok and X, American consumers quickly shared their shopping receipts from Temu, showing that a $22 product incurred an additional $31 in tariffs; a $44 product with tariffs became $106.
Amazon wanted to separately itemize tariffs in product prices to deflect consumer anger, but this angered the Trump administration. The White House spokesperson directly criticized it as 'hostile and politicized behavior,' scaring Amazon back.
However, this cannot stop the reality of skyrocketing prices. A survey by the American Toy Association revealed that due to tariffs, nearly half of over 400 American companies would go bankrupt within months. This led Trump to acknowledge in a cabinet meeting that the toys and stationery available to American children would decrease. He said, 'Some say the shelves will be empty; perhaps children will only have 2 dolls instead of 30, but those 2 dolls will only be a few dollars more.' This statement caused great anger in the U.S., and a few days later, Trump had to deny what he meant.
Not only that!
The U.S. market has not only faced skyrocketing prices but has also witnessed the penetrating capability of Chinese manufacturing. The 145% high tariffs have led many American clients of Chinese manufacturers to breach contracts, putting pressure on Chinese factories. In a desperate move, a group of Chinese bosses opened accounts on TikTok and started selling 'original order clearance goods.' They introduced the rejected OEM products to American consumers as private label goods of the same quality.
At this point, American consumers were shocked to find that the lululemon yoga pants they bought for $100 through local channels actually had a factory price of only $5-7 in China; those luxury bags they were proud of were also all OEM products from China; and the markup on brand-name sneakers from Chinese factories to American shelves reached as high as 15-20 times. These common knowledge facts familiar to Chinese people opened a new world for American consumers on TikTok.
Dunhuang.com, a niche cross-border e-commerce platform, has climbed the popular app rankings among American consumers. Taobao, an e-commerce platform primarily targeting China, has also reached the popular app rankings in the U.S. Active consumers have even traveled to China for shopping. In the first half of April, the spending of American tourists on Alipay increased by 200% year-on-year.
In the process, American consumers were pleasantly surprised and angry to find that purchasing these everyday items directly from Chinese platforms, even with the 145% tariff, was cheaper than buying them in the U.S.
Such a brutal reality would scare anyone.
Two, has the China-U.S. tariff crisis been resolved?
Personally, I don't think so.
Our entrepreneurs, especially foreign trade companies, still need to anticipate Trump's flip-flopping.
Trump once published a book called 'The Art of the Deal,' where he mentioned his proud business negotiation strategy. In simple terms, it consists of four steps: first, ask for an outrageous price; next, create a lot of publicity to put pressure on the other party; then, frequently change the negotiation conditions to disrupt the other party's rhythm; finally, under extreme pressure, reach a suboptimal result. This strategy has evidently been applied to international political games after he entered politics.
During Trump's previous term, China and the U.S. also initiated trade negotiations in 2018, where the U.S. presented a series of unrealistically high demands to China. Although both sides issued a joint statement in May 2018, the U.S. tore up the consensus just two months later and unilaterally imposed tariffs. By 2019, Trump again ignored the negotiations and unilaterally labeled China as a 'currency manipulator,' creating an excuse for subsequent sanctions. However, this accusation was later dismissed by the International Monetary Fund (IMF) and failed to succeed.
However, this time the situation of the China-U.S. tariff war is different. After experiencing China's resolute resistance, the U.S. should not unilaterally impose tariffs easily again. Perhaps, even if both sides do not reach a consensus during the 90-day buffer, the Trump administration might extend it for another 90 days, like it did with TikTok. However, during this period, whether the U.S. side will change its battleground and propose new demands in new areas is what we need to continue to monitor.
Three, political and cultural related influences
Another more significant impact—China's international reputation may rise at an unexpected speed in the next half of 2025.
Why do I say that?
Since 2025, China has intensively experienced a series of Deep Seek moments—from Deep Seek to 'Nezha 2', to the Chinese live broadcasts of YouTube celebrity Speed, and withstanding the tariff pressure from the U.S.
Recently, in the air combat between India and Pakistan, Pakistan used the J-10C fighter jets purchased from China to overwhelmingly create a miracle of 'zero combat losses while shooting down 5 Indian aircraft and 1 drone.' This event has caused a huge shock globally and is considered a 'historic breakthrough in Chinese military technology' that could profoundly reshape the military balance in South Asia and even globally.
Switching to the perspective of other countries, a country that loudly advocates peace and win-win may just be seeking self-preservation, but a country that is vigorous in military ethics while also advocating peace and win-win is likely to be sincere. Therefore, many projects and collaborations that were previously difficult to advance may accelerate, and Chinese brands that were hard to start may suddenly become very popular overseas; we can keep an eye on this.
Four, what is Trump's long-term strategy with his think tank?
We can look at this from a very interesting perspective: one of Trump's most important think tank members, also the founder of PayPal, Y2B, and an early investor in Elon Musk's SpaceX—Peter Thiel, the author of 'Zero to One,' realized early on the impact of globalization on different countries and classes and was very frustrated with the discontinuity of Western political policies.
So we can at least draw one conclusion: the reconciliation is temporary, and there will be shifts in different fields and battlefields; the only certainty is that finance and geopolitics will never be certain.