Wolfe Research analysts said the latest signals from the US and China have struck a more relaxed tone after a tense week over the threat of 100% tariffs and China’s export controls. But they stressed that any deep cooperation remains unlikely.
President Trump has calmed markets with a message of “don’t worry about China,” seen as an encouragement for investors to buy while prices are low. Beijing has insisted its export controls are not a blanket ban, in an effort to ease market concerns.
Nevertheless, the basis of the conflict remains. Both sides continue to accuse each other of violating a trade truce in May, and there is no sign that either side is ready to make major concessions.
Wolfe Research expects the best outcome at this point is a temporary truce or détente, not a full resolution, as both sides try to find a way out without losing face.
Markets have responded as usual by buying when prices fall, but analysts warn that tariff easing is still a long way off, with domestic politics risking preventing any major progress this year.
