Recently, questions arose on President Trump’s claims that China President Xi called him. The Chinese government rejected the U.S. President’s claim. In a CNBC interview on Monday, the Treasury Secretary shifted the responsibility of a trade agreement to China.
Stock markets responded by erasing the morning selling pressure. The S&P 500 (SPY) gained 0.06% to close at 5,528.75. It recovered from trading below 5,480 in Monday’s midday trade.
Bessent believed that it was up to China to de-escalate a tariff trade war that the U.S. started. He reasoned that China sold fivefold more goods than the U.S. sells to China. Since tariffs of 120% - 145% are not sustainable, China would need to open negotiations.
Stock markets are rising on the bet that the tariff rates will fall sharply. Global trading may absorb the 10% across-the-board tariffs. As trade partners respond with counter-tariffs, U.S. consumers may afford the up to 10% price increase.
Bessent said that negotiations progressed with India (INDA). Still, investors may continue a contrarian bet on China. Pony AI (PONY), for example, surged by 47.22% after it announced a Robotaxi partnership with Tencent (TCEHY). E-commerce giants JD.com (JD) and Alibaba (BABA) shares are trending higher.
PDD’s Temu unit adding a 145% tariff in response to Trump’s tariffs, PDD stock has support near $105.
