US-China Trade Deal Temporarily Eases Tariffs, Boosts Stock Market - Global X ETFs Hong Kong

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US-China Trade Deal Temporarily Eases Tariffs, Boosts Stock Market

By: Lizzy Liu

The US and China have announced to temporarily lower tariffs for 90 days (Link), with the US cutting its duties on most Chinese imports from 145% to 30%, and China lowering its tariffs on US products from 125% to 10%. This bigger-than-expected tariff reduction marks a significant de-escalation in prolonged trade dispute, and markets reacted positively to the news, with HSI/HSTech Index +3%/+5% intraday.

The agreement provides a three-month negotiation window for resolving lingering disputes and outlines a framework for sustained dialogue on broader economic issues. While the tariff rollback signals progress in de-escalating tensions, uncertainties remain regarding the ultimate acceptable goal for both sides and the timeline to reach them, with China previously demanding the complete removal of all US tariffs imposed earlier this year, highlighting that further negotiations are still needed to reach a comprehensive resolution.

We believe sectors sensitive to trade dynamics, such as technology and manufacturing, could benefit more from the recent trade deal. Companies with higher revenue exposure to US & global markets stand to gain more from the easing US-China trade tensions. We identify below Global X thematic ETFs as key beneficiaries of normalizing global trade.

US Rev Exposure
(for Chinese companies)
China Rev Exposure
(for US companies)
Global X China Global Leaders ETF (3050 HK) 9.0% N/A
Global X China EV and Battery ETF (2845 HK) 4.9% N/A
Global X G2 Tech ETF (3402 HK) 5.0% 11.1%

Source: FactSet, Mirae Asset; 12 May 2025

Global X China Global Leaders ETF (3050)

China Global Leaders ETF invests in 30 leading Chinese companies across key industries that are capturing global market share. Direct US revenue exposure is around 9%, and the lowered US tariff will directly help revenue and sentiments around exporters across sectors like home appliances, battery, and semiconductor. Additionally, domestic leaders like BYD are rapidly capturing emerging markets, while domestic business are benefiting from recovering economy and policy supports.

Global X China Electric Vehicle and Battery ETF (2845)

Leading Chinese EV OEMs, battery and autoparts companies are becoming global leaders in their respective sectors, and are set to benefiting from the improving global trade. Key holding CATL has c.10% US revenue exposure through its business partnership with leading US OEMs such as Tesla for its EV battery, and US energy companies such as NextEra and Fluence for its ESS battery. Leading global auto glass maker Fuyao Glass commands c.30% global market share, and has c.14% revenue exposure to the US. On weighted average basis, the ETF has around 5% US revenue exposure.

Global X G2 Tech ETF (3402)

G2Tech ETF invests in leading US & China technology companies across key technology sectors. While major Chinese technology companies might have limited US exposure, US technology giants, such as Apple and Nvidia, are among the key beneficiaries of a normalizing US-China trade as both companies have over 10% revenue exposure to China. Following Nvidia CEO Jensen Huang’s visits to Beijing, Nvidia is reported to be actively modifying H20 chips for China to overcome new US export controls. Share price for US Big Tech saw significant rebound immediately after US-China trade deal announcements, and we see normalizing sentiment a key driver to support the rotation of investor preference back to large cap technology stocks as bolstered by the still-solid AI progress in both countries.

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