Trump–Xi Meeting Delivers Breakthroughs on Tariffs and Trade Cooperation
6 Min. Read Time
Trump-Xi Meeting Recap
The Ministry of Commerce’s Q&A with reporters included a concise outline of the Trump-Xi meeting per their spokesperson:
- The US will cancel the so-called "fentanyl tariff" imposed on Chinese goods (including goods from the Hong Kong Special Administrative Region and Macao Special Administrative Region). The 24% reciprocal tariff imposed on Chinese goods (including those from the Hong Kong Special Administrative Region and the Macao Special Administrative Region) will remain suspended for one year. China will adjust its countermeasures in response to the tariffs mentioned above. The two sides agreed to continue extending some tariff exclusion measures.
- The US will suspend the implementation of the 50% penetration rule for export control announced on September 29 for one year. China will suspend the implementation of relevant export control measures announced on October 9 for one year and study and refine specific plans.
- The US will suspend the implementation of its 301 investigation measures on China's maritime, logistics, and shipbuilding industries for one year. Following the US' suspension of relevant measures, China will also suspend the implementation of countermeasures against the US for a period of one year.
In addition, the two sides also reached a consensus on fentanyl anti-drug cooperation, the expansion of the agricultural product trade, and the handling of relevant cases involving enterprises. The two sides further confirmed the results of the Madrid economic and trade consultations, and the United States made positive commitments in investment and other fields. China will properly resolve the relevant issues related to TikTok with the United States.
Key News
Asian equities were lower as investors recalibrated the potential for no December US Fed cut, as the US dollar strengthened overnight.
President Trump and President Xi had many positive things to say about their meeting, as today’s agreement met the market’s base forecast. We should assume dialogue will continue with the potential for a bigger, beautiful trade deal when President Trump visits China early next year.
Hong Kong volumes were very high, at 147% of the 1-year average, as markets faded in the afternoon, as the Hang Seng could close above 26,500, though stayed above 26,000. The Hang Seng Tech Index also closed above the 6,000 level. Despite a very large buy of the Hong Kong Tracker ETF from Mainland investors via Southbound Stock Connect, Connect trading accounted for only 22% of Hong Kong turnover today. This may indicate underweight foreign investors were getting involved in growth favorites, as battery giant CATL gained +2.5% and internet stocks outperformed, including Tencent, which gained +0.9%, Alibaba, which gained +0.6%, and Meituan, which gained +2.4%. It is interesting that Hong Kong-listed technology hardware stocks were off, as they could be a beneficiary of better US-China trade relations. However, one explanation was ZTE falling -11.4% after missing Q3 analyst expectations significantly. We had a similar situation in Hong Kong-listed healthcare stocks, which were off. Meanwhile, defensive non-ferrous metals stocks, which include precious metals and miners, had a strong day.
A similar situation occurred on the Mainland, as tech hardware, semiconductors, and healthcare were lower. Perhaps some profit-taking as a form of insurance, given that capital markets were also off. Yesterday we spoke about Longi Green Energy and whether their Q3 results would provide insight into the anti-involution solar campaign. Post close, the company reported Q3 net loss declined YoY to RMB -834MM from Q2 2025’s loss of RMB -1.13B and Q3 2024’s loss of RMB -1.26B. Distressed SOE real estate developer Vanke reported that after the close, Q3 operating revenue declined -27.3% YoY, while Q3 net loss increased to RMB 16B from RMB 8B YoY. Post-close, LXJM announced that its Q3 net profit increased by +32.49% YoY to RMB 4.874B. Hong Kong cut interest rates by 25bps following the US Fed due to the currency peg.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -0.2% |
| Hang Seng Tech | HSTECH Index | -0.7% |
| Hong Kong Turnover | HKTurn Index | 45.8% |
| Hong Kong Short Sale Turnover | HKSST Index | 67.9% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 15.9% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 1,742.19 |
| China (Shanghai) | SHCOMP Index | -0.7% |
| China (Shenzhen) | SZCOMP Index | -1.3% |
| China (STAR Board) | Star50 Index | -1.9% |
| Mainland Turnover | .chturn Index | 7.4% |
| Northbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Not Available |
| Jing Daily China Global Luxury Index | CHINALUX Index | -0.7% |
| Japan | NKY Index | 0% |
| India | SENSEX Index | -0.7% |
| Indonesia | JCI Index | 0.2% |
| Malaysia | FBMKLCI Index | 0.2% |
| Pakistan | KSE100 Index | -0.8% |
| Philippines | PCOMP Index | -0.6% |
| South Korea | KOSPI Index | 0.1% |
| Taiwan | TWSE Index | 0% |
| Thailand | SET Index | -0.1% |
| Singapore | STI Index | -0.1% |
| Australia | AS51 Index | -0.5% |
| Vietnam | VNINDEX Index | -1% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume as % of 1-Year Average | 147 | 143 |
| Advancing Stocks | 182 | 1331 |
| Declining Stocks | 302 | 3706 |
| Outperforming Factors | Value | Value |
| Underperforming Factors | Growth | Growth |
| Top Sectors | Materials, Utilities, Energy | Energy, Materials, Utilities |
| Bottom Sectors | Real Estate, Health Care, Consumer Staples | Information Technology, Health Care, Communication Services |
| Top Subsectors | Non-Ferrous Metals, Machinery, Electrical Equipment | Marine Industry, Steel, Base Metals |
| Bottom Subsectors | Technology Hardware, Media & Entertainment, Consumer Staples | Communication Equipment, Biotechnology, Electronic Components |
| Southbound Connect Buys | The Hong Kong Tracker ETF (Massive), Alibaba, Hua Hong Semi, Meituan (Moderate), Xiaomi (Small) SMIC (Tiny) | N/A |
| Southbound Connect Sells | ZTE, Ganfeng Lithium, Tencent | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 151 | 0 |
| Communication Services | 9 | 0.37 |
| Consumer Discretionary | 28 | 0.21 |
| Consumer Staples | 13 | -1.68 |
| Energy | 7 | 0.46 |
| Financials | 23 | -0.33 |
| Health Care | 13 | -1.93 |
| Industrials | 20 | 0.09 |
| Information Technology | 10 | -1.46 |
| Materials | 10 | 4.75 |
| Real Estate | 6 | -2.9 |
| Utilities | 12 | 0.94 |
| Mainland China Listed | 404 | -1.04 |
| Communication Services | 6 | -1.38 |
| Consumer Discretionary | 31 | -0.67 |
| Consumer Staples | 24 | -0.57 |
| Energy | 13 | 1.45 |
| Financials | 64 | -1.06 |
| Health Care | 31 | -2.33 |
| Industrials | 64 | -0.44 |
| Information Technology | 91 | -2.43 |
| Materials | 58 | 0.29 |
| Real Estate | 6 | -1.09 |
| Utilities | 16 | 0.22 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | 0.9 |
| Alibaba HK | 9988 HK Equity | 0.6 |
| JD.com HK | 9618 HK Equity | 0.1 |
| NetEase HK | 9999 HK Equity | -2 |
| Yum China HK | 9987 HK Equity | -1.6 |
| Baozun HK | 9991 HK Equity | -2.7 |
| Baidu HK | 9888 HK Equity | -2.7 |
| Autohome HK | 2518 HK Equity | -2 |
| Bilibili HK | 9626 HK Equity | -2.5 |
| Trip.com HK | 9961 HK Equity | -3.2 |
| EDU HK | 9901 HK Equity | -2.3 |
| Xpeng HK | 9868 HK Equity | 1.7 |
| Weibo HK | 9898 HK Equity | -2.1 |
| Li Auto HK | 2015 HK Equity | -1.3 |
| Nio Auto HK | 9866 HK Equity | 1.2 |
| Zhihu HK | 2390 HK Equity | 0.3 |
| KE HK | 2423 HK Equity | -2.5 |
| Tencent Music Entertainment HK | 1698 HK Equity | -4.4 |
| Meituan HK | 3690 HK Equity | 2.4 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ALIBABA GROUP HOLDING LTD | 0.6 |
| TENCENT HOLDINGS LTD | 0.9 |
| SEMICONDUCTOR MANUFACTURI-H | -1.1 |
| XIAOMI CORP-CLASS B | -1.7 |
| MEITUAN-CLASS B | 2.4 |
| PING AN INSURANCE GROUP CO-H | 1.7 |
| HUA HONG SEMICONDUCTOR LTD-H | 0 |
| ZTE CORP-H | -11.4 |
| POP MART INTERNATIONAL GROUP | 0.7 |
| NETEASE INC | -2 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| EOPTOLINK TECHNOLOGY INC L-A | -7.9 |
| SUNGROW POWER SUPPLY CO LT-A | 1.7 |
| ZHONGJI INNOLIGHT CO LTD-A | -1.1 |
| FOXCONN INDUSTRIAL INTERNE-A | -3.5 |
| VICTORY GIANT TECHNOLOGY -A | -3.1 |
| CAMBRICON TECHNOLOGIES-A | -2.7 |
| CHINA NORTHERN RARE EARTH -A | 2.3 |
| CONTEMPORARY AMPEREX TECHN-A | -0.4 |
| EAST MONEY INFORMATION CO-A | -3.2 |
| WUXI APPTEC CO LTD-A | -8.5 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 7.09 versus 7.09 yesterday
- CNY per EUR 8.25 versus 8.27 yesterday
- Yield on 10-Year Government Bond 1.82% versus 1.82% yesterday
- Yield on 10-Year China Development Bank Bond 1.89% versus 1.88% yesterday
- Copper Price +0.41%
- Steel Price +0.52%
