---
title: "Investors cheer US-China tariff truce, but cautious over a final deal"
description: "Investors reacted positively to a temporary truce in the U.S.-China trade war, leading to a rally in stocks and a rise in the dollar. U.S. tariffs on Chinese goods will decrease to 30%, while Chinese "
type: "news"
locale: "en"
url: "https://longbridge.com/en/news/239908266.md"
published_at: "2025-05-13T00:41:11.000Z"
---

# Investors cheer US-China tariff truce, but cautious over a final deal

> Investors reacted positively to a temporary truce in the U.S.-China trade war, leading to a rally in stocks and a rise in the dollar. U.S. tariffs on Chinese goods will decrease to 30%, while Chinese tariffs on U.S. imports will be 10% for 90 days. Despite the optimism, caution remains as a permanent deal is still needed, and concerns about global economic impacts persist. Analysts suggest the effective tariff rate is around 15%, indicating a net positive outcome, but uncertainty about future trade policies continues to loom.

-   US and China agree to temporarily slash reciprocal tariffs
-   Deal boosts dollar, stocks; safe havens slump
-   But uncertainty prevails, focus turning to tax cuts
-   Updates with further analyst comment, market prices at U.S. stock market close

By Amanda Cooper, Samuel Shen and Lewis Krauskopf

LONDON/SHANGHAI/NEW YORK, May 12 (Reuters) - A truce in the U.S.-China trade war set off a relief rally in stocks on Monday and propelled the dollar higher, but investors fear further negotiations could prove a long slog, as risks of a global economic slowdown persist.

After two days of talks with Chinese officials in Geneva, U.S. Treasury Secretary Scott Bessent said the two sides agreed to a 90-day pause under which tariffs would fall by over 100 percentage points.

That leaves U.S. tariffs on Chinese goods at 30% from May 14 to August 12 and Chinese duties on U.S. imports at 10%. The outcome exceeded the hopes of many investors ahead of the talks.

The dollar jumped over 1% against a basket of major currencies =USD, as the yen JPY=EBS and Swiss franc CHF=EBS fell along with other safe-haven assets like gold XAU= and government bonds.

U.S. stocks soared, with the benchmark S&P 500 index .SPX ending up 3.3%, while the tech-heavy Nasdaq Composite .IXIC jumped more than 4%.

U.S. Treasury prices sagged, sending the benchmark 10-year Treasury yield US10YT=RR to 4.48%, its highest in about a month, as investors shed safe havens and scooped up risk assets. MSCI's index of global shares .MIWD00000PUS rose over 2%.

The Cboe Volatility index .VIX, an options-based measure of investor anxiety, fell below 20 for the first time since late March.

"This is a relief rally that the worst case scenario in tariffs, being tariffs over 100%, is not likely to materialize," said John Praveen, managing director at Paleo Leon in Princeton, New Jersey. "We may not get zero tariffs but the worst case is unlikely. We've pulled back from the brink."

The cheer was tempered by caution, given a more permanent trade deal needs to be struck, while higher tariffs overall could still weigh on the global economy.

"It's long-term positive plus 90 days of uncertainty," said Charles Wang, chairman of Shenzhen Dragon Pacific Capital Management Co.

Michael Metcalfe, head of macro strategy at State Street Global Markets in London, estimated that Monday's U.S.-China deal implied an average effective tariff rate of around 15%.

"Given where expectations were, it's a net positive," he said. "You basically reverse the reciprocal tariff announcement, and if you reverse the reciprocal tariff announcement you are back to square one."

U.S. President Donald Trump had imposed tariffs of 145% on imports of Chinese goods. China in turn raised tariffs on U.S. goods to 125% and limited exports on some vital rare earth minerals.

Those measures had brought nearly $600 billion in two-way trade to a standstill, disrupting supply chains and sparking fears the global economy could crater.

Trump's April 2 "Liberation Day" announcement of sweeping tariffs sparked a sharp exit from U.S. assets, including the dollar and Treasuries, mainstays of the global financial system. Heightened uncertainty over U.S. trade policy hurt business and consumer confidence.

"It's still hard for companies to make decisions on spending," said Patrick Kaser, portfolio manager at Brandywine Global in Philadelphia. "The market is acting like the risk has gone away, but I don't think that's how a lot of businesses and companies are going to view the situation."

SOFTENING STANCE

Investors saw signs Trump may be rethinking his trade strategy, as economic indicators have weakened and central bankers have warned of risks of slowing growth and rising inflation.

A deal last week with Britain, plus positive noises from Japan, Vietnam and South Korea, helped restore some confidence, as have cooling geopolitical tensions.

"As we've seen since the start of April, lower trade uncertainty translates into lower equity market volatility, which in turn eases financial conditions and improves risk sentiment," said Angelo Kourkafas, senior investment strategist at Edward Jones in St. Louis. "That's kind of the chain reaction."

Rabobank's head of FX strategy Jane Foley said there was more optimism the tariffs will not be as devastating as many had feared, but this did not mean a return to the pre-Trump status quo.

"We still have a fair amount of uncertainty about where these tariffs will settle, their impact on world growth and central bank policy," she said.

State Street's Metcalfe said concerns could turn from trade to other issues. For instance, many investors wonder what Trump's planned tax cuts will mean for U.S. debt levels, especially as revenues from tariffs drop.

The U.S.-China trade deal "doesn't mean the policy uncertainty has gone away, it's moved on to a new area," he said.

The Treasury market's response appeared at odds with the Trump administration's goal of bringing down yields on government debt, which provide benchmarks for a wide range of borrowing costs.

"Bessent's goal of getting long-term rates down is now in tatters,” said Dean Smith, chief strategist at FolioBeyond in New York.

## Related News & Research

| Title | Description | URL |
|-------|-------------|-----|
| 沃尔玛四季度财报超预期但盈利指引不及预期，CEO 称 “美国低收入家庭只能勉强维持生计” | 沃尔玛 Q4 营收超预期，新财年盈利指引（每股 2.75-2.85 美元）远低于市场预期的 2.96 美元，显示通胀压力下消费者支出不确定性犹存，拖累股价下跌 1.38%。财报印证 K 型” 分化：高收入家庭驱动增长，低收入群体 “钱包吃紧 | [Link](https://longbridge.com/en/news/276398633.md) |
| 谷歌突然发布 Gemini 3.1 Pro：核心推理性能直接翻倍 | 谷歌发布了最新的大模型 Gemini 3.1 Pro，其推理性能较去年发布的 Gemini 3 Pro 翻倍。在 ARC-AGI-2 评测中，Gemini 3.1 Pro 得分 77.1%，显示出强大的推理能力。新模型支持多源数据综合和复杂 | [Link](https://longbridge.com/en/news/276396515.md) |
| 学习英伟达刺激芯片销售，AMD 为 “AI 云” 借款做担保 | AMD 为扩大市场份额祭出金融 “狠招”！为初创公司 Crusoe 的 3 亿美元购芯贷款提供担保，承诺在其无客户时 “兜底” 租用芯片。这一复刻英伟达 “租卡云” 路径的策略虽能短期推高销量，但也令 AMD 在 AI 需求放缓时面临更大的 | [Link](https://longbridge.com/en/news/276401504.md) |
| 最高法裁决后特朗普动用替补选择：加征 10% 全球关税 | 美国总统特朗普在最高法院裁决后宣布将加征 10% 的全球关税，以补救被推翻的关税措施。根据《1974 年贸易法》第 122 条款，现有的关税将全面生效。最高法院裁定特朗普政府的部分关税措施缺乏法律授权。市场风险提示，投资需谨慎。 | [Link](https://longbridge.com/en/news/276477629.md) |
| 美股盘中速递：Ondas 跌 11.41% 成交量激增，买入评级难阻市场谨慎情绪 | Ondas 跌 11.41%；Lumentum 控股涨 5.33%，成交额达到 20.19 亿美元；思科涨 0.03%，成交额达到 10.27 亿美元；讯远通信涨 5.31%，成交额达到 5.61 亿美元；Arista Networks 跌 | [Link](https://longbridge.com/en/news/276474753.md) |

---

> **Disclaimer**: This article is for reference only and does not constitute any investment advice.
