Group 1: Trade Negotiation Outcomes - The U.S. will reduce the fentanyl tariff by 10 percentage points, while China will lower retaliatory tariffs on U.S. agricultural products (such as soybeans) and energy[5] - Both sides will suspend the 24% reciprocal tariffs and the 50% export control measures for one year[5] - Maritime, logistics, and shipbuilding sanctions will also be paused for one year[6] Group 2: Market Implications - The outcomes align with market expectations and previous forecasts regarding rare earth controls and soybean purchases in exchange for tariff reductions[7] - After the tariff reductions, China's tariffs are now on par with Southeast Asia, only 5 percentage points higher than those of Europe and Japan, which is marginally beneficial for exports[7] Group 3: Future Developments - Tariff disputes are expected to evolve, with less likelihood of comprehensive increases in the future, and the fentanyl tariff may continue to be eliminated in subsequent negotiations[8] - Despite recent U.S. retreats in trade confrontations, ongoing competition suggests that conflicts may persist, particularly in electronics, new energy, and pharmaceuticals[8] Group 4: Risk Factors - There are risks of actual execution falling short of expectations, potential policy reversals, and changes in import-export policies[12]

Key Points - The article discusses the recent developments in China-US trade relations, highlighting the joint statement from the Geneva economic talks on May 12, 2025, where both countries agreed to modify tariffs on each other's goods [2] - The US will suspend the implementation of a 24% tariff on Chinese goods for the first 90 days and retain a 10% tariff, while China will similarly adjust its tariffs on US goods [2] - On May 14, the US reduced the tariff on small packages from China, lowering the international mail tax rate from 120% to 54% [2] - The US consumer price index (CPI) for April 2025 showed a year-on-year increase of 2.3%, slightly down from 2.4% in March, marking the lowest level since February 2021 [3] - In April 2025, new RMB loans in China amounted to 280 billion, a decrease of 450 billion year-on-year, while the total social financing scale was 1,158.5 billion, an increase of 1,224.3 billion year-on-year [3] - The broad money supply (M2) in China grew by 8.0% year-on-year, an increase of 1.0 percentage points from the previous month [3] - The bond market faced downward pressure following the "double reduction" policy, with short-term bonds strengthening while long-term bonds showed weakness due to profit-taking [4] - The overall bond market was under pressure after the joint statement from the China-US economic talks, leading to a slight widening of the yield spread [4]

Core Viewpoint - The reduction of tariffs between the US and China is expected to significantly improve market sentiment and economic growth expectations, particularly benefiting export-related industries and sectors that have previously undergone substantial adjustments [1][2][4]. Group 1: Tariff Reduction Impact - The US has reduced tariffs on Chinese goods from 145% to 30%, with specific adjustments made in February, March, and May [4][5]. - China has reciprocated by suspending its 24% tariffs on US goods, lowering the tax rate from 125% to 10% [4][5]. - The tariff reductions exceed market expectations, indicating a potential for improved trade relations [3][4]. Group 2: Industry Beneficiaries - Export-related industries such as new energy, machinery, and home appliances are expected to benefit directly from improved export channels and revised profit expectations [2]. - The TMT sector (telecommunications, media, and technology) is also likely to see a recovery due to improved market sentiment and increased trading activity [2]. Group 3: Market Dynamics - The "see-saw" effect between stocks and bonds may lead some investors to shift funds towards equity markets, increasing pressure on interest rate bonds [2]. - The reduction in tariffs is anticipated to boost China's economic growth expectations, which may result in a phase of adjustment for long-term interest rate bonds [2].