Core Insights - Investors are optimistic that President Trump's upcoming trip to Asia may lead to a trade truce with China, which could significantly impact markets [1][2] Group 1: Trade Negotiations - The ongoing trade negotiations between the US and China are expected to be another data point in the series of tit-for-tat economic actions, with limited high expectations for a breakthrough [3] - Positive outcomes from the talks could include discussions on key issues such as soybeans and rare earths, but any truce is likely to be temporary rather than a grand bargain [4][8] - The dynamics of the trade relationship have changed since the previous trade war in 2017-2018, with China developing new leverage tools that may require the US to make concessions [4][5] Group 2: Economic Dependencies - Both the US and China aim to reduce their dependency on each other while maintaining essential trade ties, recognizing that complete decoupling is not feasible [5][6] - China seeks to secure semiconductors and reduce its reliance on US goods, while the US is focused on rare earths [6][8] - The mutual economic dependencies may incentivize both sides to avoid severe economic downturns, leading to a muddled truce while pursuing long-term goals [7][8]