Progress in Trade Talks Between the USA and China
The continuation of trade talks between the USA and China is viewed positively by the stock market, as it hopes for a de-escalation in the tariff dispute. These developments have potential implications for the markets and may be of interest to investors in the German-speaking region.
Background of the Trade Talks
- Tariff Dispute and Declining Trade: Trade between the USA and China has significantly decreased in recent months, attributed to the ongoing tariff dispute. In May, imports and exports between the two countries fell once again.
- Agreement in Geneva: In May, the USA and China agreed to temporarily lower tariffs. China was to suspend 24 percentage points of the additional tariffs on US products for 90 days and lift other measures.
Current Developments
- Talks in London: Recent trade discussions are taking place in London, with both sides trying to reduce tensions over rare earths and high-tech industries. The USA and China accuse each other of breaking the agreement from Geneva.
- Export of Rare Earths: China has approved some applications for the export of rare earths without providing details about the recipient countries or industries. The USA is pressing for these shipments to return to levels seen before April.
Market Implications
- Market Expectations: Markets are reacting positively to the continuation of trade talks, as a de-escalation in the tariff dispute could lead to the stabilization of global trade flows. This could have a positive effect on stock markets.
- Investor Interest: These developments are of interest to investors in the German-speaking region, as they can impact the global economy and thus investments in international markets.
Outlook
- Future Talks: The discussions in London are part of an ongoing process to improve trade relations. Both sides have agreed on a mechanism to continue discussions, which can take place in China, the USA, or a third country.
- Political Support: The talks are being led by high-ranking representatives from both sides, including Chinese Vice Premier He Lifeng and the US delegation led by Treasury Secretary Scott Bessent.