Readers who looked at the White House’s press releases on the ASEAN trade meetings might think the U.S. won the trade talks. Unfortunately, the billions in deals announced with Japan are mostly loans. Smaller Asian firms like Cambodia and Vietnam also announced deals. They looked good, but the deal with China mattered most.
China agreed to resume the purchase of U.S. soybeans. However, the volume promised is below the average that it bought in previous years.
The U.S. said it would lower tariffs by 10%. Tariffs related to fentanyl would fall from 20% to 10%. The overall tariff rate on Chinese goods is around 47%.
China agreed to pause its rare-earth export controls. Unfortunately, this means that the two countries would need to come up with an agreement again. Shares of MP Materials (MP) lost 10.9% last week. Lithium Americas (LAC) lost 18.5%.
Chinese technology firms also fell last week. Alibaba (BABA) dropped by 2.4%, although PDD Holdings (PDD) rose slightly.
Who Won
When countries impose tariffs on each other, no one wins in the trade negotiations. When the U.S. lowered tariffs on China, Americans still ended up paying for them. Stock markets did not pay much attention to the week-long talks. The S&P 500 (IVV) traded sideways in that time, closing near its all-time high.
