Xi-Trump talks buy China time to decouple at its own pace

The reversal of some US tariffs on China won’t have a big impact given that Chinese exporters had largely shrugged them off. But the de-escalation takes the immediate threat of large tariff hikes off the table, removing a key downside risk to the near-term outlook. And improved access to Nvidia chips could, if confirmed, help support the growth of China’s AI ecosystem. The underlying forces driving the US and China apart remain unresolved, however, and so tensions could easily flare up again. And even if the current truce holds, both sides will continue to pursue wider decoupling efforts.