The U.S. is actively working to reduce reliance on Chinese imports and is investing heavily in domestic industries like artificial intelligence, especially in data center financing.

Morgan Stanley analysts observe a cyclical pattern in U.S.-China trade tensions, with both sides avoiding a complete economic split due to the high costs involved.

Recent trade tensions escalated after China expanded controls over rare earth exports, prompting threats of retaliatory tariffs from the U.S., but there are signs of potential easing.

Both nations are carefully calibrating their actions to prevent severe economic fallout, maintaining a delicate and cautious balance in their relationship.

Analysts believe that the pattern of negotiations and temporary truces will likely continue rather than lead to a permanent trade peace or complete decoupling, reflecting the complex nature of their relationship.

The ongoing trade disputes are marked by cycles of tariffs, export controls, and market volatility, with no lasting resolution in sight.