Asian equities saw a welcome rebound on Wednesday, buoyed by news that the United States and China are set to resume trade talks this weekend—offering a glimmer of hope amid fears of a prolonged trade war.
The announcement helped lift market sentiment across the region, with major indexes from Hong Kong to Jakarta registering solid gains.
Investor morale soared after both Washington and Beijing confirmed that senior officials would meet in Switzerland for trade negotiations. This marks the first high-level engagement since U.S. President Donald Trump announced a new wave of tariffs on April 2, which triggered alarm in global markets and reignited recession concerns.
U.S. Treasury Secretary Scott Bessent confirmed that he and Trade Representative Jamieson Greer will meet with Chinese Vice Premier He Lifeng to lay the foundation for further negotiations.
Speaking on Fox News, Bessent said, “This meeting will be about de-escalation, not a comprehensive trade deal. We’ve got to bring down the temperature before we can move forward.”
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While welcoming the talks, China’s Ministry of Commerce maintained a firm stance. It reiterated that Beijing would defend its core interests and warned against any coercive tactics disguised as diplomacy.
“If the U.S. talks in one way and acts in another—or tries to blackmail China—there will be no deal,” the ministry said, calling on Washington to recognize the global fallout of its unilateral tariff measures.
Trump has so far imposed a staggering 145% in new tariffs on Chinese imports, while China has retaliated with 125 tariffs on American goods, intensifying fears of a prolonged and damaging trade standoff.
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The news of renewed dialogue triggered a rally across Asian markets. Hong Kong’s Hang Seng Index surged more than 1%, while Shanghai followed closely behind. Other regional markets, including Sydney, Seoul, Wellington, Manila, and Jakarta, also ended higher.
“Just as traders were ready to abandon ship on the ‘Trump Trade War’ narrative, the White House throws out a teaser for possible progress,” said Stephen Innes of SPI Asset Management. “Now, investors are scrambling to chase any hint of tariff relief.”
Adding further fuel to the rally was Beijing’s latest move to support its slowing economy. The People’s Bank of China announced a cut to a key interest rate and reduced the reserve requirement ratio (RRR) for banks, aiming to stimulate lending and ease liquidity concerns.
Additionally, the central bank lowered interest rates for first-time homebuyers with long-term mortgages in a bid to stabilize the country’s troubled property sector.
While markets cheered trade developments, traders are also watching the India-Pakistan border closely after reports of artillery exchanges following India’s recent missile strikes on Pakistani territory. The situation adds another layer of uncertainty, especially with both nations being nuclear-armed powers.
Meanwhile, back in Washington, the Federal Reserve is expected to hold interest rates steady during its meeting later Wednesday. However, markets will be closely analyzing the Fed’s post-meeting statement for clues on future rate cuts—particularly in light of Trump’s tariff pressure and its potential economic ripple effects.
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