In particular, Trump’s demands followed China- and Russia-backed Shanghai Cooperation Agency (SCO). President Vladimir Putin and Indian Prime Minister Narendra Modi attended the summit.
While targeting China through the EU, the US has also resumed trade talks with India. President Trump announced his progress towards the deal, saying:
“We are pleased to announce that India and the United States are continuing negotiations to address trade barriers between our two countries.[…[IfeelcertainthattherewilbenodifficultyincomingtoasuccessfulconclusionforbothofourGreatCountries!”[…[IfeelcertainthattherewillbenodifficultyincomingtoasuccessfulconclusionforbothofourGreatCountries!”
Trump could put pressure on India to stop buying Russia’s oil and retreat from China. Will the US President seek to balance in his favor ahead of new trade talks with China?
China’s economy is tense
US tariffs are beginning to affect China’s economy. Exports to the US fell 33% year-on-year in August, with a total export increase to 4.4% compared to 7.2% in July. The unemployment rate rose from 5% to 5.2%, and the youth unemployment rate skyrocketed to 17.8% in August, up from 14.5% in July. The sharp rise in unemployment among young people highlighted challenges in the structural labor market. The rising unemployment rate also weighed on retail sales, raising questions about Beijing’s 5% GDP growth target.
Beijing has pledged a fresh stimulus package in response to slowing economic momentum. On Wednesday, September 10, China’s National People’s Parliament Standing Committee held a plenary session, pledging to use fiscal policy to support stable employment and trade.
Commenting on China’s trade data and economic outlook, Robin Brooks, a senior fellow at the Brookings Institute, said:
“China is in a tough place. Exports to the US were 24%Q/Q in June 2025. Exporters have only two options: (i) Products shipped to the US.
Mainland stock markets own companies
Mainland China’s stock markets avoided a sharp reversal of profits from the start of the year, despite the formation of a reduction in economy and margins.
The CSI 300 and Shanghai Composite Index tracked the Nasdaq Composite Index (13.34%), increasing YTD by 12.97% and 13.74%. However, the Hang Seng index leads the way, bringing together 30.61% YTD, benefiting from the influx of mainland China and foreign investors.
Beijing’s pledge to support the economy has strengthened demand for stocks listed on the mainland and Hong Kong. However, trade development, China’s housing crisis and domestic demand will become key market forces in the short term.
Mitigating external demand can affect the labor market. Rising unemployment rates could undermine Beijing’s efforts to weigh consumer sentiments against spending and promote consumption.
But dealing with the housing sector crisis and reaching a trade deal with the US could change the narrative. Importantly, trade contracts are likely to increase external demand and ease margin pressure. Increased margins could encourage job creation and boost domestic consumption.