Trade War Update – May 14, 2025
Tensions between the U.S. and China have eased significantly with both countries announcing major tariff reductions. The U.S. cut tariffs on Chinese goods from 145% to 30% and slashed the "de minimis" rate from 120% to 54% with a $100 flat fee. In response, China lowered its tariffs on U.S. imports from 125% to 10%. These changes, effective for 90 days, aim to stabilize trade and reopen dialogue.
Markets responded positively—S&P 500 erased its 2025 losses, Nasdaq rose 1.6%, and Asian markets like Hong Kong’s Hang Seng and Korea’s Kospi jumped 1.1%. Meanwhile, gold prices dipped as risk sentiment improved and investors moved away from safe-haven assets.
This truce marks a critical turning point in the U.S.-China economic standoff, potentially paving the way for longer-term cooperation and market stability.
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