The United States and China conducted difficult negotiations in London lasting 48 hours, temporarily avoiding the outbreak of a full-scale trade war, but the situation remains tense, with August 10 being seen as a critical time point.

The most significant outcome of this negotiation is the substantial reduction of tariffs by both parties. The punitive tariffs imposed by the United States on China have been drastically reduced from 145% to 30%, while China's tariffs on the U.S. have also been lowered from 125% to 10%. Both sides have made substantial concessions, demonstrating a willingness to ease tensions.

However, there are still many issues behind the facade of reconciliation. The United States has not lifted its chip ban and aircraft equipment restrictions on China, and insists on the legitimacy of its 34% "standard" tariffs. Despite a significant decrease of 34.5% in exports to the U.S. in May, China successfully brought the U.S. back to the negotiating table by leveraging its advantages in rare earth resources.

The global market has reacted strongly to this trade friction: the World Bank has lowered its global economic growth forecast, and the President of the European Central Bank has warned that the trade war could lead to a serious crisis in the global economy. Countries related to aircraft manufacturing, such as the EU, Japan, and Mexico, have expressed concerns about the worsening situation.

The financial market has also experienced severe fluctuations: rare earth-related stocks have surged, especially the performance of related companies in the Shenzhen area; at the same time, the US dollar has shown a downward trend, reflecting the uncertainty in the market.

In the current situation, the Trump administration is prepared for possible tariff measures, while Beijing holds the key leverage of rare earth resources. The actions of both sides before August 10 will determine the next steps in the trade relationship, and market participants need to closely monitor developments.