By Lale Akoner
Might 21, 2025
The US-China tariff truce is a tactical pause, not a last deal however for markets, nevertheless it’s a significant de-escalation. Whereas the structural points stay unresolved, the sign is evident: neither facet desires to push commerce tensions additional. Slashing duties from 145% to 30% (US) and 125% to 10% (China) marks a dramatic de-escalation, doubtless aimed toward calming markets and averting additional financial drag.
Nonetheless, follow-through issues greater than headlines. The deal continues to be brief on element, and it’s unclear what an “acceptable” consequence appears to be like like for both facet. China desires full rollback; the US continues 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 “Section One” was signed. Talks might lead to “buying agreements,” however previous expertise (just like the short-lived 2018 détente) exhibits how fragile these offers will be. With each side holding legacy tariffs in place and core disagreements unresolved, the highway to a sturdy accord stays lengthy. This time may very well be totally different, however with no clear framework or binding phrases, the chance of déjà vu lingers.
Nonetheless, if this truce holds, it’s an actual tailwind for world danger property, particularly exporters, cyclicals, and provide chain-sensitive sectors.
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