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World Welcomes US-China Tariff “Ceasefire”

The world warmly welcomed the tariff "ceasefire" between the United States and China. The world stock market strengthened slightly, investors became a little calmer with the hopes that emerged after the US and China were willing to negotiate. 

On the other hand, there are still concerns about the continued agreement process between the two countries. China also continued its campaign to suppress unilateral US actions. 

On Monday (12/5/2025), Beijing and Washington announced an agreement to lower import duties between each other for 90 days. Washington cut tariffs on Chinese goods from 145 percent to 30 percent. China reduced retaliatory tariffs on US goods from 125 percent to 10 percent. This policy will take effect from 14 May 2025. 

During the 90 days, the US and China will continue to negotiate. The results of the negotiations in the meantime exceeded market and investor expectations. 

“Make no mistake, this is highly orchestrated diplomacy. However, the results are good and the implications are real. It shows that this administration is also aware of the economic impact of relentless tariffs,” said Stephen Innes, Head of Trading and Market Strategy at SPI Asset Management. 

As a result, euphoria was still felt in several stock markets on Tuesday (5/13/2025). Most Asia Pacific stock markets started the day positively. Tokyo closed trading up 1.4 percent. Strengthening was also seen in the Shanghai, Sydney, Taipei, Singapore, Seoul, Wellington, Bangkok, and Manila stock markets. 

Wall Street also welcomed the US-China deal with enthusiasm. The Nasdaq Composite skyrocketed more than 4 percent, the S&P 500 jumped 3.3 percent, and the Dow rose 2.8 percent. Meanwhile, the Chinese stock index listed in the US jumped more than 5 percent. 

In Europe, the UK’s FTSE 100 rose 0.1 percent, while the CAC in France rose 0.2 percent. However, Hong Kong’s Hang Seng Index fell 1.4 percent and India’s Sensex fell 1.5 percent. 

Meanwhile, the US dollar weakened slightly. The US dollar fell 0.45 percent against the yen and 0.56 percent against the franc. The euro rose 0.18 percent and the pound rose 0.22 percent against the US dollar. 

In contrast, the yuan hit a six-month high of 7.1855 per US dollar. This condition also lifted the Australian dollar up 0.55 percent and the New Zealand dollar up 0.5 percent. Both currencies are often used as liquid proxies for the yuan. 

“We will see a longer-term trend where the US dollar will weaken because people realize that they have been over-invested in US assets massively. And that is a kind of ‘tectonic shift’. The yuan is clearly the currency that benefits the most at the moment,” said Kit Juckes, head of FX strategy at Societe Generale. 

Meanwhile, the price of West Texas Intermediate (WTI) crude oil rose 0.2 percent to 62.06 US dollars per barrel. The price of Brent North Sea crude oil rose 0.1 percent to 65.04 percent per barrel. 

Tag: Ceasefire China United States US-China Tariff