SINGAPORE (Reuters) – U.S. and China Reach Trade Truce, Markets React
U.S. President Donald Trump and China’s Xi Jinping concluded talks on Thursday at a South Korean air base with both leaders sounding optimistic about cooling trade tension between the world’s two largest economies.
Trump announced a deal to reduce tariffs on China in exchange for Beijing resuming U.S. soybean purchases, keeping rare earths exports flowing, and cracking down on illicit trade of fentanyl.
Investor and Analyst Reactions:
KYLE RODDA, SENIOR MARKET ANALYST, CAPITAL.COM, MELBOURNE:
“The markets rallied earlier in the week on expectations of positive outcomes from the trade talks. However, there was some ambiguity surrounding the extent of tariff reductions, leading to mixed reactions in the market.”
VINCENT CHAN, CHINA STRATEGIST, ALETHEIA CAPITAL, HONG KONG:
“The trade agreement details remain unclear, but it is anticipated that tariffs on Chinese goods will align more closely with those of other Southeast Asian countries. The long-term strategic competition between the U.S. and China will likely keep trade relations unstable.”
MARCO SUN, CHIEF FINANCIAL MARKET ANALYST, MUFG BANK (CHINA), SHANGHAI:
“The meeting has brought a sense of calm to financial markets, signaling potential for further trade discussions between the two nations. Future cooperation could reshape long-term relations and industrial developments through mutual compromises.”
EMANUEL DATT, PRINCIPAL, DATT CAPITAL, MELBOURNE:
“With a trade agreement in place, we expect to see positive movements in equity markets, particularly in high-beta sectors like technology and biotech, as well as conventional areas such as logistics. Gold and rare earth equities may experience weaker performance.”
TARECK HORCHANI, HEAD OF DEALING, PRIME BROKERAGE, MAYBANK SECURITIES, SINGAPORE:
“The trade truce is viewed as a temporary relief rather than a fundamental change. Agriculture remains a focal point, but underlying tensions in technology, supply chains, and rare earths persist unresolved.”
MUHAMMAD SAIFUDDIN BIN SAPUAN, ECONOMIST, KENANGA INVESTMENT BANK, KUALA LUMPUR:
“The current truce is likely a strategic pause to ease tensions, providing short-term stability to global sentiment and trade expectations. However, the structural decoupling between the U.S. and China continues to shape the long-term outlook.”
(Reporting by Yantoultra Ngui, Rae Wee and Gregor Hunter Stuart in Singapore, Jiaxing Li in Hong Kong, Scott Murdoch in Sydney; Compiled by Ankur Banerjee; Editing by Lincoln Feast and Clarence Fernandez)
