Core viewpoint: On October 9, 2025, Trump announced plans to impose 100% tariffs on Chinese goods starting from November 1, triggering a new round of turbulence in the global market. Compared to the so-called "equivalent tariffs" in April, this threat is more targeted and the timing is subtle: on the one hand, it directly responds to China's recent systemic countermeasures such as rare earth full supply chain control and anti-monopoly investigations against American companies; On the other hand, setting the effective date one week before the APEC summit highlights its strategic intention as a bargaining chip.
The market response exhibits significant "learning effects" and differentiation characteristics. The initial sell-off of global risk assets has eased compared to April, and the "TACO trading" strategy (betting that aggressive policies will not be fully implemented) has become a consensus among institutions. Asset performance shows structural differentiation: A-shares are suppressed by both supply side effects and weak internal macro momentum, making it more difficult for them to rebound than in April; Domestic priced goods (such as steel) have shown stronger resilience than stock markets and internationally priced goods (such as copper) due to anchoring domestic demand policy expectations. Behind this differentiation is the market's repricing of the two main themes of "domestic demand policy hedging" and "game dynamic equilibrium".
Whether the APEC summit can achieve a heads of state meeting has become a core variable in the short-term market direction. If a phased agreement is reached during the meeting, the market may replicate the recovery trend after April; If the meeting fails, it means that the risk of losing control of the game increases and assets will face repricing pressure. In the medium to long term, the game between China and the United States is entering a new stage: both sides have more systematic means (from China's rare earth technology control to the United States' precise tariffs), the conflict mode tends to be "regularized", and the market needs to adapt to the new environment of normalized volatility. Focus on the substantive progress of the implementation pace of domestic demand policies and the reconstruction of the industrial chain.
The escalation of tariff friction after the October holiday has triggered a market risk aversion wave
On October 9, 2025, Trump announced plans to impose 100% tariffs on Chinese goods starting from November 1, which immediately triggered a severe shock in global risk assets. The US stock market experienced its largest decline since April, with the S&P 500 index falling 2.7% and the Nasdaq index plummeting 3.6%, AMD, Qualcomm and other technology stocks have all fallen by over 7%. The commodity market suffered simultaneous setbacks, with copper prices falling by 4%, crude oil prices falling, and gold breaking through the $4000/ounce mark, leading to a sharp rise in market risk aversion.
The timing of this tariff threat is quite profound. On the one hand, it occurred after China announced the strengthening of rare earth supply chain control and launched anti-monopoly investigations against American companies, forming a superficial "tit for tat" situation; On the other hand, the effective date of November 1st happens to be one week before the APEC summit, highlighting its strategic intention as a bargaining chip. Compared to the so-called "equivalent tariff" policy on April 2nd, this threat is more targeted, but the market response mechanism may show new characteristics
Variant of Extreme Pressure: This is a manifestation of precision gaming
This tariff game demonstrates the typical characteristics of the new stage of China US trade friction. China's countermeasures have upgraded from traditional export controls to systematic game tactics: the new regulations on rare earths extend the scope of control to overseas items and technologies containing Chinese components, anti-monopoly investigations directly target the core business of American companies, and strict inspections by customs on semiconductor goods form a precise strike. This combination of "technical constraints+legal tools" demonstrates the maturity of China's game strategy
Trump chose to threaten 100% tariffs three weeks before the APEC summit, continuing his consistent strategy of "maximum pressure". It is worth noting that unlike the "equivalent tariffs" targeted globally in April, this threat specifically targets China and leaves a policy window of nearly three weeks, which leaves room for negotiations between the two sides. According to Polymarket's gambling market data, the current probability of 100% tariffs ultimately being implemented is less than 30%, reflecting the market's general expectation of the "TACO deal" (Trump style agreement)
03
Differentiated response of domestic assets: Stocks may fall together, but commodities may be more resilient to the downturn
1. From the recent performance of stock traders, it can be seen that the direction of the domestic stock market has a significant impact on the direction of commodities, and how the stock market changes is particularly important
Preliminary judgment is that there is a high probability of a significantly lower opening, but the trend will be significantly differentiated, and the difficulty of rebound will be greater than in early April. Affected by the "catch-up effect" of the sharp decline in overseas markets (especially A50 futures and Chinese concept stocks) during the National Day holiday, it is highly likely that A-shares and Hong Kong stocks will open significantly lower (as previously predicted). Similar to early April, the initial market reaction may be indiscriminate selling driven by risk aversion sentiment
But the difference is that 1) macro expectations are not strong. The current domestic economy's endogenous momentum is weaker than at the beginning of April, and policies are in an observation period. Although the market has expectations for the "increase in domestic demand policy", the specific intensity and timing are uncertain, making it difficult to immediately form strong support. 2) The stock market has already risen with the tide. 3) The complexity of the game has escalated: after the tariff threat in April, both sides finally eased it through dialogue; And this time, China took the lead in playing cards such as "rare earth control" and "anti-monopoly investigation", showing a tougher game stance, deepening market doubts about whether both sides can quickly return to the negotiating table.
2. Similar to early April, domestically priced goods have relatively strong resistance to decline, but cannot escape emotional impact
On the one hand, global risk aversion will lead to an overall outflow of funds from the commodity market, and domestic black commodity futures will follow the stock market to open lower. Long positions closing will trigger short-term declines. On the other hand, the core driving force behind "domestically priced" commodities such as steel lies in the domestic supply and demand fundamentals, namely the expectations of the "domestic demand policy". Unlike copper, which is closely linked globally, it is less directly affected by the US dollar and overseas demand. Moreover, given the performance in early April, although domestic priced goods may be dragged down by the stock market, there is reason to believe that their performance will be better than the stock market. The key anchor point for the subsequent trend will shift from external friction to whether the upcoming important domestic conference will release unexpected signals of stable growth, as well as macro data at the end of October.
3. Reality is indeed similar to expectations
On October 13th, after the holiday opening, the A-share market welcomed a rebound as scheduled. But unlike the "V-shaped reversal" at the beginning of April, this market has shown more complex differentiation characteristics: technology stocks and export dependent sectors heavily invested by foreign capital have suffered significant selling pressure, while domestic demand driven consumption and infrastructure sectors have shown strong resilience. Behind this differentiation is the market's repricing of domestic policy expectations - in the context of weak endogenous economic momentum, investors' expectations for the "policy of increasing domestic demand" have risen, but the uncertainty of the specific timing of policy implementation has constrained the market's rapid rebound momentum
The commodity market presents a clearer logical mainline. Compared with internationally priced copper and crude oil, domestically priced black commodities exhibit significant resistance to decline. Although rebar futures opened lower with the stock market, they quickly regained some lost ground. This difference stems from two key factors: the continuous promotion of domestic "dual" project construction, and the market's expectation for important domestic conferences to release signals of stable growth. In contrast, copper prices are under continuous pressure due to global demand concerns and US dollar liquidity pressures.
04
Enhanced market learning effect, pricing 'TACO trading'
Compared to the tariff shock in April, the current market shows a clear 'learning effect'. After the introduction of equivalent tariffs by the United States on April 3rd, the tariff rates of both China and the United States quickly increased to 125% within 10 days. According to Polymarket data at that time, the market believed that the probability of tariff easing was less than 15%. After the announcement of the 100% tariff threat, the level of panic significantly weakened and signs of a rebound quickly appeared.
This change stems from the market's deep understanding of Trump's game strategy: "extreme demands creating panic negotiating compromise" has become a predictable pattern. The "TACO trading" strategy is popular among institutional investors, which involves buying at the bottom when Trump's aggressive policies cause a market crash, betting that his policies will not fully implement. The formation of this consensus has significantly reduced the market impact of the tariff threat compared to April.
The reaction of two types of asset prices best reflects the above viewpoint. Firstly, the US dollar index has not significantly declined, and as of the publication of this article, the US dollar index has slightly risen. This is different from the significant decline in the US dollar index after the implementation of "equivalent tariffs" on April 3rd. This indicates that the international foreign exchange market did not panic about this sudden news. Secondly, the price of gold continues to rise. On the one hand, this is a result of risk aversion, and on the other hand, it is different from the phenomenon of risky assets and risk-free assets such as gold falling together after the implementation of the "equivalent tariffs" on April 3. At that time, due to the tight market liquidity, there was a decline in safe haven assets, and the asset price changes caused by this sudden news are still a "normal phenomenon".
05
APEC is a key node
Whether the APEC summit can achieve a heads of state meeting has become a core variable that determines the direction of the market. Trump's escalation of friction in the three weeks before the summit precisely indicates that his ultimate goal is still to reach an agreement. Historical experience has shown that Trump's "extreme demands" often experience a significant pullback in the final stages of negotiations, which is also the fundamental reason why the "TACO deal" strategy can remain effective.
However, compared to April, the current market environment has undergone significant changes: firstly, A-shares have been in a relatively high position after a temporary rise, and valuation pressure is greater than at the beginning of April; Secondly, the complexity of the game between China and the United States has significantly increased, and China's more aggressive countermeasures and "preemptive moves" may make simple analogies of the April market inaccurate; Finally, the global liquidity environment has become more complex due to the pressure of US bond maturity, and the structural shortage of US dollar liquidity may amplify asset volatility.
If the APEC meeting is held as scheduled and signals easing, the market may quickly replicate the recovery trend after April. But if the meeting fails, the market will have to face the worst-case scenario of a 'prolonged trade war', at which point risk assets may face a new round of selling pressure.
06
How to view the future game equilibrium?
The current trade game between China and the United States is forming a new equilibrium pattern. On the one hand, Trump's "maximum pressure" strategy has been fully recognized by the market, and "TACO trading" has become the mainstream expectation; On the other hand, China's countermeasures are more systematic, from rare earth control to anti-monopoly investigations, demonstrating stronger game playing ability. This dynamic balance means that the effectiveness of trading strategies based solely on tariff announcements will gradually decline, and the market needs to pay more attention to structural opportunities.
In the future, we need to focus on changes in three dimensions. Firstly, the pace of domestic policies, especially whether important conferences release signals of stable growth that exceed expectations; Secondly, there has been substantial progress in the decoupling of technology between China and the United States, particularly in the evolution of policies in key areas such as semiconductors and artificial intelligence; The third is the reconstruction of the global liquidity environment, and the change in US dollar liquidity under the pressure of US bond maturity may become a key variable affecting asset prices.
It is worth noting that the "rule-based confrontation" feature exhibited in this game may become the new normal of future Sino US economic and trade relations. Both sides are learning to establish a new system of rules in conflict, which requires the market to adapt to a new environment where volatility is normalized but not out of control
07
What impact will asset prices, especially commodity prices, have?
In the new market environment, researchers and other market participants may need to adjust their strategies from the following aspects:
Firstly, we need to pay more attention to the marginal changes in policies. Compared to April, the current market is more sensitive to policies, and any signals about domestic demand stimulus or trade easing may trigger significant fluctuations. It is recommended to pay attention to the infrastructure industry chain related to the "dual" projects, as well as the domestic demand sector that benefits from potential consumer stimulus policies.
Secondly, the future scenario may become more complex considering the high uncertainty of the outcome of the APEC meeting: if the meeting achieves positive results, the market may quickly replicate the recovery trend after April; If the meeting falls short of expectations, domestically priced goods may be more resistant to decline.
Finally, we must be vigilant about the risk of excessive concentration of market consensus. When "TACO trading" becomes a common expectation, any unexpected situation (such as tariffs actually falling) may trigger a severe market reversal.
Overall, although the 100% tariff threat this time is a continuation of the April game, the market environment, policy tools, and investor expectations have undergone profound changes. In the context of intensified short-term volatility, only by grasping the two main themes of "domestic demand policy hedging" and "game dynamic equilibrium" can we more accurately discern market trends. Whether the APEC summit can reveal the final outcome of this short-term game will be a key turning point in determining the direction of asset prices in the fourth quarter. We continue to emphasize that with the increasing maturity of the game tactics between China and the United States and the deepening of market learning effects, a new equilibrium based on "controllable conflicts" between major powers is gradually taking shape.
