By Lale Akoner
Could 21, 2025
The US-China tariff truce is a tactical pause, not a remaining deal however for markets, nevertheless it’s a significant de-escalation. Whereas the structural points stay unresolved, the sign is obvious: neither facet needs to push commerce tensions additional. Slashing duties from 145% to 30% (US) and 125% to 10% (China) marks a dramatic de-escalation, possible geared toward calming markets and averting additional financial drag.
Nonetheless, follow-through issues greater than headlines. The deal remains to be brief on element, and it’s unclear what an “acceptable” end result appears like for both facet. China needs full rollback; the US remains to be chasing commerce stability and enforcement instruments. The 90-day cool-off echoes 2018’s ceasefire which finally collapsed into deeper battle earlier than “Part One” was signed. Talks might end in “buying agreements,” however previous expertise (just like the short-lived 2018 détente) exhibits how fragile these offers could be. With either side conserving legacy tariffs in place and core disagreements unresolved, the street to a sturdy accord stays lengthy. This time could possibly be completely different, however with out a clear framework or binding phrases, the chance of déjà vu lingers.
Nonetheless, if this truce holds, it’s an actual tailwind for international danger belongings, particularly exporters, cyclicals, and provide chain-sensitive sectors.
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