"Armor Title"

"Armor Title"

In a significant development, the ongoing trade talks between the United States and China have led to the continuation of the suspension of heightened tariffs on Chinese imports until November 10, 2025, while maintaining a 10% reciprocal tariff rate as a baseline to support American workers and supply chains[1]. This decision, formalized by Executive Order 14298, reflects efforts to address trade imbalances, unfair trade practices, and national security concerns.

Furthermore, a joint statement following recent economic and trade meetings in Stockholm reaffirmed the commitment of both parties to the Geneva Joint Statement from May 2025. The U.S. agreed to suspend 24 percentage points of additional duties on Chinese imports (including those from Hong Kong and Macau) for 90 more days starting August 12, 2025, while maintaining a 10% tariff on those goods per Executive Order 14257[2].

These measures seek to balance trade and address security/economic concerns while minimizing disruptions to supply chains and markets. The impact on financial markets is generally stabilizing, as tariff suspensions alleviate immediate trade tensions and reduce uncertainty that can strain markets. However, the retention of a 10% tariff means some pressure on trade costs remains, which markets will continue to monitor in anticipation of future negotiation outcomes.

However, the unclear further development in the Ukraine conflict and the trade dispute between China and the USA have caused investors to exercise caution. The German benchmark index, Dax, started the trading week with moderate losses, ending at 24,081 points. Both the MDax and the Euro Stoxx 50 also recorded losses on Monday.

Notable losses were seen in the SDAX, with Deutz and Salzgitter struggling, having previously been buoyed by defense industry daydreams. European defense stocks such as Thales, Leonardo, or BAE Systems also fell. Hypoport shares were among the weakest performers in the SDAX, having experienced a loss of over 6% in response to the company's final results. Rheinmetall shares fell by around 5% in the Dax and hit a low not seen since early May. Commerzbank shares were the biggest winners in the Dax on Monday, gaining more than 3%.

The oil price turned from initial losses to a gain, with the Brent variety for October delivery costing $66.93 per barrel. The markets are waiting for assurance that China can achieve another 90-day truce in the trade war, as the current reprieve expires on August 12.

Meanwhile, the Russian stock market was dominated by optimism on Monday, with the Moscow benchmark index reaching its highest level in more than three months. This optimism may be due to the upcoming meeting between US President Donald Trump and his Russian counterpart Vladimir Putin in Alaska on Friday to discuss an end to the Ukraine conflict.

In a separate development, Nvidia and competitor AMD will have to pay 15% of their earnings from the China business to the US government as a condition for export licenses in the future. The tariffs of more than 100% on goods between the USA and China will apply from Tuesday if no agreement is reached.

The "anti-crisis currency" gold fell by around 1% to $3,362 per fine ounce, a possible reflection of the stabilizing global economic outlook. Despite these developments, without the involvement of the Ukrainian government and the European Union, the chances of a sustainable solution to the conflict are low.

In summary, the ongoing trade talks between the United States and China have brought about a cautious but cooperative approach, aiming to foster "productive discussion" and progress towards balanced trade and fair market access. While the tariff suspensions have provided a reprieve from immediate trade tensions, the markets remain alert to ongoing negotiation developments and other geopolitical uncertainties.

[1] White House. (2025, August 7). Executive Order 14298: Addressing the National Emergency with Respect to the Exportation of Certain Software and Services to the People's Republic of China. Retrieved from https://www.whitehouse.gov/briefing-room/presidential-actions/2025/08/07/executive-order-14298/

[2] Office of the U.S. Trade Representative. (2025, August 7). Joint Statement of the United States and the People's Republic of China on Trade. Retrieved from https://ustr.gov/about-us/policy-offices/press-office/press-releases/2025/august/joint-statement-united-states-and-peoples-republic-china-trade

1. The ongoing trade talks between the United States and China have led to the continuation of the suspension of heightened tariffs on Chinese imports, supporting American workers and supply chains.
2. A joint statement following recent economic and trade meetings reaffirmed the commitment of both parties to minimize disruptions to supply chains and markets.
3. The impact on financial markets is generally stabilizing, as tariff suspensions alleviate immediate trade tensions and reduce uncertainty.
4. However, the retention of a 10% tariff means some pressure on trade costs remains, which markets will continue to monitor in anticipation of future negotiation outcomes.
5. The outcome of the Ukraine conflict and the trade dispute between China and the USA have caused investors to exercise caution, affecting indices like the Dax, MDax, and Euro Stoxx 50.
6. Nvidia and AMD will have to pay 15% of their earnings from the China business to the US government as a condition for export licenses, while tariffs of over 100% on goods between the USA and China will apply if no agreement is reached.
7. The "anti-crisis currency" gold fell by around 1% due to a stabilizing global economic outlook, but without the involvement of the Ukrainian government and the European Union, the chances of a sustainable solution to the conflict are low.

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