#TradeWarEases **Breakthrough in US-China Trade Relations: Market Stability and New Challenges**

The two-day negotiations between the US and China in Geneva, which concluded with an agreement to establish a consultation mechanism, indicate a easing of trade tensions. This may spark cautious optimism in global markets: a rise in stocks in sectors affected by tariffs (automobiles, electronics) is likely, especially if a joint statement on May 12 announces a partial reduction of tariffs.

The parties are likely to focus on lifting restrictions on semiconductor and agricultural trade, which will alleviate bottlenecks in supply chains and slightly reduce inflation. This will also give central banks more room to maneuver in monetary policy.

In the long term, dialogue may shift confrontation to managed competition, stabilizing supply chains. However, risks remain: China's subsidies and US export restrictions on technology remain contentious points. Domestic politics — the US elections and the slowdown of the Chinese economy — may hinder progress.

Easing tensions is positive for the EU and ASEAN and the active development of the alliance.**