Politics
US-China trade truce:Global Markets Rally as Tariff Tensions Ease Between Superpowers
US-China trade truce
Global Stocks Surge as U.S. and China Pause Tariff War
Updatix , May 13 – Global stock markets rallied on Monday following a temporary trade truce between the U.S. and China, easing tensions in a prolonged tariff war that had threatened global economic stability.
The agreement involves both nations reducing steep tariffs for 90 days. The U.S. will lower tariffs on Chinese imports from 145% to 30%, while China will cut its duties from 125% to 10%. Additionally, China agreed to lift restrictions on rare earth minerals and magnets, essential in high-tech manufacturing.
Despite the pause, key issues remain unresolved, including the U.S. trade deficit with China and demands for Chinese action on the U.S. fentanyl crisis. Treasury Secretary Scott Bessent, who led the negotiations in Geneva, acknowledged that fully reshaping the trade relationship could take years.
Financial markets responded positively. The S&P 500 and Nasdaq Composite posted their highest closes in months. The dollar strengthened while gold prices dipped, reflecting reduced—but not eliminated—investor concerns.
President Trump hailed the agreement as a success of his tariff strategy. “They’ve agreed to open China, fully open China,” he said, calling it a step toward peace and economic cooperation.
China’s state media noted a shift toward cooperation, emphasizing strong potential for economic partnership with the U.S.
However, critics pointed out that 90 days may be insufficient to address deeper concerns, including Chinese subsidies and non-tariff barriers. Trump’s tariffs have drawn opposition from small businesses, truckers, and consumers concerned about rising costs.
Scott Kennedy of the Center for Strategic and International Studies said the U.S. had effectively backed down, while former trade adviser Kelly Ann Shaw defended the move as fulfilling campaign promises.
Trump’s fluctuating tariff policy has unsettled markets and contributed to uncertainty. Some of the earlier tariffs, including those from Trump’s first term and 100% duties on electric vehicles and 50% on solar products imposed under President Biden, remain in place.
Port of Los Angeles director Gene Seroka warned that 30% tariffs could impact retail pricing. Monday’s deal also excludes exemptions for low-value e-commerce shipments, which ended earlier this month.
Retailers like Abt Electronics are managing inventory cautiously due to the volatile environment. “Everyone wants consistency, and that’s been the hard part,” said co-president Mike Abt.
Shipping firms expect a short-term boost in orders, but ongoing uncertainty may limit broader investment. The Geneva truce marked a win for Bessent, who advocated for the 90-day pause to allow room for negotiation.
“The consensus from both delegations is that neither side wants decoupling,” Bessent said. “We want more balanced trade, and both sides are committed to achieving that.”
The next round of talks has yet to be scheduled.