Global markets cheered the opening of the China-U.S. economic and trade consultation mechanism in London, signaling renewed hope for easing a costly tariff standoff between the world’s two largest economies. The first day of talks follows a high-profile phone call between Chinese President Xi Jinping and U.S. President Donald Trump, aimed at turning diplomatic consensus into concrete trade and investment outcomes.
Market Reaction: Investors and shippers wasted no time to react. Freight rates surged, reflecting a pick-up in shipping demand, while U.S. stock indexes rallied, with the S&P 500, Nasdaq and Dow Jones all posting solid gains. This immediate optimism underscores confidence that dialogue can cool trade tensions and bolster growth.
Background: The London dialogue builds on May's Geneva meeting, where both sides paused tariff escalations and agreed on a formal consultation framework. Tariff hikes this spring had disrupted global supply chains, driven up consumer prices and raised recession risks. A Harris Poll conducted for Bloomberg News found many Americans are tightening their belts, and data from Bank of America shows allocations to U.S. assets at their lowest in nearly two decades. The International Monetary Fund has suggested a 40% chance of a U.S. recession.
Leadership on the Ground: The Chinese mainland delegation, led by Vice Premier He Lifeng, sits down with a U.S. team headed by Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer. Both sides have emphasized that dialogue and cooperation are the only path forward, with Chinese President Xi underscoring sincerity and principles in pursuit of win-win results.
Expert View: "These talks won't be easy, but they rest on a strong foundation laid in Geneva," says Wu Zewei, special researcher at Sushang Bank. He believes the mechanism in London can boost bilateral cooperation prospects, potentially paving the way for shared prosperity and more stable global trade.
What's Next: As the second day of consultations unfolds, global businesses, startups and digital nomads alike will be watching closely. Positive outcomes could reshape trade flows, reduce costs and offer new opportunities across sectors—from tech innovation to sustainable travel.
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China-U.S. trade talks in London receive positive market reception
cgtn.com
