Tariff War Eases: Opportunities and Hidden Worries
On May 12, 2025, the China-U.S. tariff war eased, with both sides reducing tariffs to 10% and suspending 24% tariffs for 90 days, bringing a turning point to the global economy, but many uncertainties remain behind.
China: Tactical Victory and Long-term Challenges
The reduction in tariffs alleviates pressure on exporters and stimulates consumption of American goods, while maintaining a firm stance on rare earth controls and gaining control over the industry chain. However, due to the tariff war, industries such as American soybeans have lost the Chinese market (with Brazil occupying over 20 million tons of the share) and are unlikely to regain it. There are still risks of policy fluctuations from the U.S. during the 90-day observation period.
United States: Short-term Benefits and Deep-rooted Contradictions
The easing of tariffs boosts market confidence and alleviates inflation, but does not address the fundamental issue of trade deficits; instead, increased tariffs have pushed domestic prices higher. Continued rare earth controls are impacting the military supply chain, with divisions between moderates and hardliners within the White House, compounded by the unpredictable nature of Trump’s policies, leaving the future full of uncertainties.
Global Impact and Future Outlook
The easing of tariffs stabilizes multilateral trade expectations, but systematic competition between China and the U.S. is difficult to eliminate, and the U.S. may shift toward technological blockades. The 90-day observation period agreement is fragile; the tariff war is essentially a struggle for dominance over industry chains and geopolitical power, and the long-term competitive landscape remains unchanged. Companies and investors need to pay attention to negotiation dynamics, seize opportunities, and avoid risks.
On May 12, 2025, the China-U.S. tariff war eased, with both sides reducing tariffs to 10% and suspending 24% tariffs for 90 days, bringing a turning point to the global economy, but many uncertainties remain behind.
China: Tactical Victory and Long-term Challenges
The reduction in tariffs alleviates pressure on exporters and stimulates consumption of American goods, while maintaining a firm stance on rare earth controls and gaining control over the industry chain. However, due to the tariff war, industries such as American soybeans have lost the Chinese market (with Brazil occupying over 20 million tons of the share) and are unlikely to regain it. There are still risks of policy fluctuations from the U.S. during the 90-day observation period.
United States: Short-term Benefits and Deep-rooted Contradictions
The easing of tariffs boosts market confidence and alleviates inflation, but does not address the fundamental issue of trade deficits; instead, increased tariffs have pushed domestic prices higher. Continued rare earth controls are impacting the military supply chain, with divisions between moderates and hardliners within the White House, compounded by the unpredictable nature of Trump’s policies, leaving the future full of uncertainties.
Global Impact and Future Outlook
The easing of tariffs stabilizes multilateral trade expectations, but systematic competition between China and the U.S. is difficult to eliminate, and the U.S. may shift toward technological blockades. The 90-day observation period agreement is fragile; the tariff war is essentially a struggle for dominance over industry chains and geopolitical power, and the long-term competitive landscape remains unchanged. Companies and investors need to pay attention to negotiation dynamics, seize opportunities, and avoid risks.
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