Hello everyone, a warm welcome to all who follow global economics and US-China trade relations!

Recently, US Treasury Secretary Scott Bessent, in an interview with Bloomberg Television, delivered a clear message to markets: investors don't need to worry about the upcoming deadline for China tariffs. His statement undoubtedly served as a "reassurance" to the anxious market.

Background: The August 12 Tariff Truce

Since the announcement of a 90-day tariff truce in the US-China trade war on May 12, global markets have been closely watching the progress of negotiations between the two sides. August 12 marks the end of this truce period, and there's widespread concern that if no agreement is reached by then, higher tariffs on Chinese goods will be reimposed, potentially impacting the global economy.

Bessent's "Reassurance"

However, Secretary Bessent, in his Bloomberg Television interview, stated directly: "I’m telling market participants not to worry about Aug. 12.” He emphasized that getting a deal with China is more important than a deadline itself.

His remarks have been interpreted by some on Wall Street as part of the "TACO" trade pattern – an acronym for "Trump always chickens out," meaning markets fall on tariff threats but rebound when the president backs down. While Trump himself rejects this label, Bessent's comments indeed suggest that in trade negotiations, reaching an agreement is the primary goal.

Tech Stocks Rise, Inflationary Pressures Emerge

Following this news, shares of US chipmaker Nvidia and the index of Chinese American depositary receipts (ADRs) both saw increases. Bessent also revealed that licensing companies like Nvidia to resume H20 chip sales to China was part of the trade negotiation strategy. He stated: "You could say that was a bargaining chip that we used when we were negotiating in Geneva and in London, and that’s part of the overall setup."

However, it's worth noting that despite the potential tariff deadline extension, the impact of tariffs on US consumer prices has already become apparent. In June, the US Consumer Price Index (CPI) rose by 0.3% month-on-month, higher than May's 0.1%. Economists pointed out that the cost of tariffs was "significantly visible" in June's CPI data, with price increases being more pronounced for goods heavily reliant on imports.

Future Outlook

While markets remain concerned about potential inflation and supply chain issues stemming from tariffs, Secretary Bessent's statement has undoubtedly offered a temporary reprieve from this anxiety. It indicates that at the critical August 12 juncture, US-China trade negotiations might see more flexible timelines to pursue a comprehensive resolution.

We will continue to monitor the latest developments in US-China trade negotiations to bring you in-depth analysis.