Broker Name: China Galaxy International Securities (Hong Kong) Co., Limited
Date of Report: October 13, 2025
Excerpt from China Galaxy International Securities report.
Report Summary:
- US President Donald Trump announced a 100% tariff on Chinese goods and potential export controls, escalating US-China trade tensions; China responded with rare earth export controls, special port fees for US ships, and anti-monopoly probes on US firms.
- The report expects full 100% tariffs are unlikely, with negotiations probable; China will focus on macro policies to stabilize domestic demand and markets, and while Chinese stocks may see short-term volatility, the medium-term outlook remains positive due to resilient industry and policy support.
- Key sectors of conflict include shipbuilding and rare earths, both of which have strategic and military significance. The US aims to curb China’s industrial rise while China’s countermeasures show willingness to negotiate but readiness to retaliate if needed.
- The “TACO” (Trump Always Chickens Out) theory suggests a high likelihood that Trump will return to the negotiating table, using tough rhetoric as a negotiation tactic rather than a commitment to full escalation.
- Macro policy in China will prioritize risk prevention, employment, and market stability, with potential for further fiscal and monetary easing to counter external shocks. China’s domestic policy and market mechanisms, such as a stabilization fund, are expected to limit the long-term market impact.
- Chinese A-shares may fluctuate in the short term but are expected to maintain an upward trend; bond yields may initially fall then rise, and the RMB is expected to remain stable with some short-term pressure but potential appreciation into year-end if positive signals emerge.
- Main risks highlighted include unexpected central bank policy shifts, less-than-expected US Fed easing, and larger-than-expected tariff hikes.
Above is an excerpt from a report by China Galaxy International Securities (Hong Kong) Co., Limited. Clients of China Galaxy International Securities can be the first to access the full report from the China Galaxy International Securities website: https://www.chinastock.com.hk
