#TradeWarEases TradeWarEases: A 90-Day Truce Sparks Global Market Rally

On May 12, 2025, the United States and China announced a significant de-escalation in their ongoing trade conflict, agreeing to a 90-day suspension of recent tariff hikes. The U.S. will reduce tariffs on Chinese imports from 145% to 30%, while China will lower its tariffs on U.S. goods from 125% to 10%. This temporary truce, forged during talks in Geneva, aims to alleviate economic tensions and pave the way for more comprehensive negotiations.

The announcement had an immediate positive impact on global financial markets. U.S. stock futures surged, with the S&P 500 and Dow Jones indices experiencing notable gains. Asian and European markets also responded favorably, reflecting renewed investor confidence. The U.S. dollar strengthened, while demand for safe-haven assets like gold declined.

Analysts view this development as a crucial step toward stabilizing global trade relations, though underlying issues remain unresolved. The agreement does not address all contentious topics, such as technology transfers and intellectual property rights. However, both nations have expressed a commitment to ongoing dialogue, signaling a willingness to work toward a more durable resolution.

While the 90-day period offers a window of opportunity for progress, the temporary nature of the deal means that uncertainties persist. Market participants and policymakers will closely monitor the situation, hoping that this truce leads to lasting improvements in U.S.-China trade relations.