Markets Rebound As Vance Plays Good Cop; Says ‘Willing To Be Reasonable’ With China

Who could have seen this coming?

After President Trump (perhaps unexpectedly) caused a shitstorm in markets on Friday with his threats against China, it appears the scale of the carnage required ‘good cop’ VP Vance to calm the waters before futures open tonight.

The FT reports that Beijing has slammed President Trump’s plan to impose additional 100 per cent tariffs on Chinese exports and threatened new countermeasures as it blamed the US for escalating tensions between the world’s two biggest economies.

The commerce ministry said on Sunday that since the two countries held trade talks in Madrid last month, the US had “continuously introduced a series of new restrictions against China”, including putting Chinese companies on a trade blacklist.

“China’s position on tariff wars has been consistent: we do not want to fight, but we are not afraid to fight,” the ministry added.

So, VP Vance was rolled out to Sunday morning shows to walk-back the US rhetoric a little…

During an interview with Maria Bartiromo on Fox News, JD Vance called on Beijing to “choose the path of reason” in the latest spiraling trade fight between the US and China, claiming that President Donald Trump has more leverage.

“It’s going to be a delicate dance, and a lot of it is going to depend on how the Chinese respond,” Vance said on Fox News’s Sunday Morning Futures.

“If they respond in a highly aggressive manner, I guarantee you, the president of the United States has far more cards than the People’s Republic of China. If, however, they’re willing to be reasonable,” he said, then the US would, too.

Vance, who said he had spoken with Trump Saturday and Sunday, said the president “appreciates the friendship that he’s developed with Xi,” but added, “We have a lot of leverage. And my hope, and I know the president’s hope, is that we don’t have to use that leverage.”

He added that the good relationship is threatened “if the Chinese go down this pathway of cutting off the entire world from access to some of the goods that they produce.”

“We’re going to find out a lot in the weeks to come about whether China wants to start a trade war with us, or whether they actually want to be reasonable. I hope they choose the path of reason,” Vance said.

Watch the subtle shift in stance here…

“We’re going to find whether China wants to start a trade war with us or be REASONABLE” — US Vice President, Vance pic.twitter.com/ksQ1m8X5cW

— Jeff George (@jhon_odey) October 12, 2025

Crypto markets are up significantly on the comments with Ethereum outperforming…

And IG shows The Dow trading up around 155pts at time of writing…

So, circling back to where we started, who could have seen this coming? Well, us for sure…

Odds of Trump Sunday evening post:

“Had a great call with China’s wonderful president Xi Jinping, and our relations have never been better. Look forward to our meeting in two weeks. Thank you for your attention to this matter!”

— zerohedge (@zerohedge) October 10, 2025

As we noted on Friday, Brace for the TACO Monday meltup as with one post, Trump pulled the Nasdaq from overbought… in fact, RSI is now below 50. 

And just like that, the euphoria has reset.

Will the market ever learn?

And the market always falls for it pic.twitter.com/HwMKdmjA8Z

— zerohedge (@zerohedge) October 10, 2025