Progress in U.S.–China Trade Talks: What Traders Should Watch Now

The latest round of trade negotiations between the United States and China concluded in Geneva over the weekend, marking the most constructive diplomatic engagement between the two nations in over a year. Both sides described the talks as “substantial,” with U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng agreeing to release a joint statement outlining progress made on tariffs, export controls, and a framework for ongoing consultation.

While no final agreement has been signed, the shift in tone is notable. These talks come just days after President Trump signaled that the U.S. would reduce tariffs on Chinese imports from 145% to 80%. Though still high by historical standards, this rollback suggests the White House is now prioritizing de-escalation after months of trade confrontation. China, facing a slowdown in exports and rising domestic deflationary pressure, appears open to limited concessions in order to stabilize trade flows.

Market Movers: Sectors and Assets in Focus

The Geneva talks have already started to ripple through the markets. Traders are now positioning around key sectors and instruments most exposed to U.S.–China trade dynamics.

Chinese equities, particularly large-cap manufacturers and exporters, have rallied since the announcement of the tariff reduction. The iShares China Large-Cap ETF (FXI) jumped nearly 3% in intraday trading following news of the talks’ progress. Traders are also watching Alibaba (BABA) and JD.com (JD), two consumer-focused tech giants with significant sensitivity to cross-border trade sentiment.

In the U.S., companies with large China revenue exposure—especially in semiconductors and industrial goods—stand to benefit from any easing in tariff pressure. Names like Qualcomm (QCOM) and Texas Instruments (TXN) have begun to see renewed interest. The broader S&P 500 Index (US500) also gained on Monday’s open, with trade-sensitive components leading the move.

On the currency side, the USD/CNH pair has shown tightening volatility, reflecting a short-term pause in the risk-off positioning that dominated April. Should the talks lead to further tariff relief or a schedule for phased reduction, USD/CNH may extend lower toward the 7.15 support zone.

Commodities are also in play. Traders in copper (XCU/USD) and aluminum (XAL/USD) are pricing in stronger Chinese demand if trade conditions normalize. Agricultural futures, including soybeans (ZS), could also benefit, as China remains a major buyer and has previously cut U.S. imports in retaliation for tariffs.

Outlook: Structured Talks, Limited Trust

Despite the positive headlines, traders should not expect a quick return to pre-2018 trade norms. The underlying strategic tension between Washington and Beijing remains. What Geneva has achieved is a working framework for future communication and an implicit acknowledgment that neither side currently benefits from continued escalation.

The U.S. appears intent on retaining pressure in key technology sectors, especially AI and chip manufacturing. China, meanwhile, is unlikely to abandon its industrial policy ambitions. The likely outcome is a tactical stabilization—enough to reduce headline risk but far from a structural reset.

Markets are now looking toward two key milestones: the release of the official joint communiqué from Geneva, and any signals from Beijing or Washington regarding a formal follow-up round before the G20 summit. Until then, price action will be sensitive to leaks, official statements, and political posturing on both sides.

Tips for Traders

• Watch USD/CNH for short-term reaction to any formal statement; further yuan strength could confirm easing tensions.

• Consider long positions in FXI, BABA, or JD if sentiment remains positive and talks progress.

• Track U.S. semiconductor stocks like QCOM and TXN for upside on tariff relief news.

• Look at copper (XCU/USD) and soybeans (ZS) for possible strength on improving Chinese demand expectations.

• Use stop-loss protection. Headlines remain a risk, and talks can turn quickly.