The recent meetings in Stockholm aimed at extending the current US-China trade truce. Both parties wish to delay any escalation into a trade war, agreeing to extend the status quo as they reconsider their positions.<\/p>\n
China announced the extension, though US officials stated President Trump will have the final decision. This reflects ongoing frustrations and differing understandings of agreements reached in discussions between the US and China.<\/p>\n
Though both countries are cooperating for now, the true outcome of the next steps remains uncertain. An extension appears likely, potentially leading to a meeting between Trump and Xi Jinping by October or before Thanksgiving.<\/p>\n
A possible summit could highlight future trade discussions. However, reflecting on past events like the 2019 Phase One trade deal, this could merely serve as a public display without substantial concessions from either side. As months progress, both nations’ strong stances may lead to continued stalemates.<\/p>\n
With the final decision on the China trade truce extension still pending, we are seeing signs of nervousness in the markets. The CBOE Volatility Index, or VIX, has edged up to just over 18 this past week, reflecting trader uncertainty. This mirrors the pattern we saw back in 2019, where every headline about the talks caused sharp, short-term market swings.<\/p>\n
The most probable outcome is that Trump approves the 90-day extension, simply delaying any major confrontation. If this happens, traders should anticipate a brief relief rally in equity indices like the S&P 500 and a corresponding drop in the VIX. This creates a short window to profit from selling overpriced options premium, as implied volatility will likely fall sharply on the news.<\/p>\n
However, we must remember that this is just kicking the can down the road. The underlying tensions have not gone away, a fact supported by the latest Commerce Department data from June 2025 showing the U.S. trade deficit with China widened slightly. As we learned from the Phase One deal, these agreements are often fragile and more about political appearances than lasting resolutions.<\/p>\n
Therefore, any market strength in August should be viewed as an opportunity to position for future volatility. Looking ahead to the potential Trump-Xi meeting in October, it would be prudent to start building longer-dated protective positions. Buying put options on key indices or exchange-traded funds with expirations late in the fourth quarter could be a smart hedge against the theatrics failing to produce a real breakthrough.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" US-China extend trade truce amid uncertainty; summit possible, but meaningful concessions remain doubtful amid tensions.<\/p>\n","protected":false},"author":62,"featured_media":16992,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-27636","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/27636","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=27636"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/27636\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16992"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=27636"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=27636"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=27636"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}