By Lale Akoner
Might 21, 2025
The US-China tariff truce is a tactical pause, not a last deal however for markets, however it’s a significant de-escalation. Whereas the structural points stay unresolved, the sign is evident: 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 continues to be quick on element, and it’s unclear what an “acceptable” final result seems to be like for both facet. China needs full rollback; the US continues to be chasing commerce stability and enforcement instruments. The 90-day cool-off echoes 2018’s ceasefire which in the end collapsed into deeper battle earlier than “Part One” was signed. Talks might lead to “buying agreements,” however previous expertise (just like the short-lived 2018 détente) exhibits how fragile these offers could be. With each side preserving legacy tariffs in place and core disagreements unresolved, the street to a sturdy accord stays lengthy. This time may very well be completely different, however with no clear framework or binding phrases, the danger 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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