--- title: "Tariffs have been significantly reduced, is it time to ALL IN US stocks?" type: "Topics" locale: "zh-CN" url: "https://longbridge.com/zh-CN/topics/29538043.md" description: "Hello everyone, this is Dolphin Research! From April 2nd's tariff liberation day to May 12th, after more than a month of tariff tug-of-war between China and the U.S., May 12th finally brought a sigh-of-relief negotiation result - the U.S. will impose 30% tariffs on China, with an additional 24% suspended for 90 days; China will impose 10% tariffs on the U.S., with an additional 24% suspended for 90 days. Regardless of how this outcome affects both nations, it's clearly positive for capital markets. But now the question is..." datetime: "2025-05-12T13:16:49.000Z" locales: - [en](https://longbridge.com/en/topics/29538043.md) - [zh-CN](https://longbridge.com/zh-CN/topics/29538043.md) - [zh-HK](https://longbridge.com/zh-HK/topics/29538043.md) author: "[Dolphin Research](https://longbridge.com/zh-CN/news/dolphin.md)" --- > 支持的语言: [English](https://longbridge.com/en/topics/29538043.md) | [繁體中文](https://longbridge.com/zh-HK/topics/29538043.md) # Tariffs have been significantly reduced, is it time to ALL IN US stocks? Hello everyone, I'm Dolphin Research! From April 2nd, the day of tariff liberation, to May 12th, after more than a month of tariff tug-of-war between China and the U.S., on May 12th, the two countries finally reached a relieving negotiation result—the U.S. imposed a 30% tariff on China, with an additional 24% suspended for 90 days; China imposed a 10% tariff on the U.S., with an additional 24% suspended for 90 days. This outcome is undoubtedly a significant positive for the capital markets, regardless of its impact on China and the U.S. But the question now is: Does this mean the risks in U.S. stocks are eliminated? Can U.S. stocks continue their post-pandemic glory, and should people go ALL IN on U.S. stocks again? **1\. Did Everyone Win Big This Time?** According to the latest Sino-U.S. trade negotiation announcement, after a round of mutual confrontation, both sides have reverted to the tariffs imposed on April 2nd, the day of liberation. The additional tariffs imposed after April 2nd—50% and 41%—have all been canceled. Regarding the 34% reciprocal tariffs the U.S. imposed on China on April 2nd, 10% will remain, while the remaining 24% will be suspended for 90 days. China has adopted the same approach: retaining 10% tariffs on the U.S. and suspending the remaining 24% for 90 days. Before April 2nd, the re-elected Trump had already imposed two consecutive 10% tariff hikes on all Chinese goods in February and March, citing fentanyl as the reason, totaling 20%. Before the reciprocal tariffs on April 2nd, China's countermeasures remained largely rational and restrained, mainly targeting specific U.S. industries like agriculture and implementing non-tariff measures such as adding U.S. companies to the unreliable entity list, monitoring exports of rare earths and tungsten, and launching antitrust investigations against companies like Google. Before April 2nd, the tariffs and non-tariff measures imposed by both sides under the pretext of fentanyl remained unchanged. Thus, since Trump's re-election, the final tariff increase on China is 30% + 24%, with the 24% portion suspended for 90 days. For the U.S., China's tariffs are 10% + 24%, with the 24% portion also suspended for 90 days (for a detailed explanation, click [here](https://longportapp.cn/zh-CN/topics/29528910) on the app). Additionally, during Trump's first term, the weighted average tariff on China was about 20%. Combined with the new tariffs, the U.S. comprehensive tariff rate on China would be around 50%, plus the 24% suspended for 90 days. In other words, although tariffs have been reduced somewhat, they remain relatively high. However, from a phased perspective, as the U.S.'s primary trade deficit partner, China's tariff rates in this round of **reciprocal tariffs** are no higher than those imposed on other countries that have already reached agreements. Of course, Trump's domestic propaganda might claim that tariffs on China have been raised again, and the U.S. is winning big. For the market, whether it's the tariff rates or the 90-day suspension, the outcome is clearly better than expected, and the market will undoubtedly welcome it positively. **2\. What Can U.S. Tariffs Actually Achieve?** But does this mean investors can go ALL IN on U.S. assets now? Dolphin Research believes it's essential to understand the essence of this tariff hike: based on concluded negotiations, both surplus countries like the U.K. and deficit countries like China have been hit with 10% reciprocal tariffs. Clearly, **Trump's goal this time isn't to reduce global trade barriers but to impose tariffs for the sake of imposing tariffs. If the final outcome is a 10-15% tariff on all goods imported into the U.S., whether the aim is to reshore manufacturing or reduce fiscal deficits, the effect will likely fall far short:** a. In the U.S. federal fiscal year ending October 2024, $65 billion in tariff revenue accounts for just over 1.5% of the total federal revenue of $4.1 trillion. Meanwhile, the narrow fiscal deficit is over $800 billion, and the broad deficit (including debt interest costs) reaches $1.6 trillion. Even with additional tariffs, it's hard to fill the fiscal gap. **b. As a Means to Reshore Manufacturing?** Reshoring manufacturing is a rare bipartisan consensus in the U.S., but the approaches differ drastically. Trump's core strategy is tax cuts + deregulation, coupled with direct negotiations with major companies to bring back investments from firms like TSMC and Apple. Biden's three major economic bills, however, focus on industrial subsidies. To reshore manufacturing, production capacity must first be built. The chart below shows U.S. manufacturing construction spending trends: Trump's first term saw modest growth, while Biden's policies triggered a significant surge. However, from mid-2024 to March 2025 (before tariff impacts), manufacturing construction spending stagnated again. If tariffs are raised to narrow the price gap between U.S.-made and imported goods, convincing Americans to buy domestic products, the cost disparity in industries like consumer electronics, batteries, solar, and EVs (excluding low-end manufacturing like textiles) far exceeds 10-15%. Expecting a 10-15% tariff to drive consumers toward domestic goods is unrealistic. **3\. Will the Manufacturing Reshoring Plan Fail? It Depends on Tax Cuts and Industrial Policies** According to U.S. Treasury Secretary Besant, post-negotiation, the U.S. will continue addressing supply chain vulnerabilities exposed during the pandemic—whether in pharmaceuticals, semiconductors, or steel. "The U.S. has identified 5-6 strategic industries and weak supply chain links where it will strive for self-sufficiency or safer sourcing from allies." His remarks suggest that while a complete decoupling from China is unlikely, the U.S. will still push for supply chain reshoring and adjustments to ensure "supply security." Since manufacturing reshoring can't rely solely on tariffs, the remaining two pillars of Trump's MAGA economic plan—tax cuts and deregulation—become critical. **To some extent, U.S. stock performance from late 2025 to 2026 hinges on the intensity of tax cuts and industrial policies in late 2025. But the fatal flaw here is that tax cuts and industrial stimulus require fiscal backing.** **This circles back to the old problem—Musk's DOGE government efficiency plan hasn't saved much federal spending, and tariffs haven't generated enough revenue to plug fiscal gaps.** The key questions are: a. How aggressive will upcoming tax cuts and industrial policies be? b. If they're aggressive, how will the resulting deficit be financed amid 10-year Treasury yields at 4.3%? Since Trump's re-election, the Republican-led federal government has tried reducing reliance on short-term debt and returning to long-term bond markets. But two major obstacles remain: **First, Powell refuses to cut rates amid tariff-induced inflation uncertainty.** **Second, even if short-term rates drop, long-term yields hover above 4% (currently 4.37%), with the yield curve steepening. Risk premiums for long-term bonds keep rising, especially as Trump "plays tough" globally. How much incremental demand is there from foreign sovereign funds?** For now, financing looks challenging. Of course, if all else fails, there's always the Fed: beyond rate cuts, it could directly buy long-term Treasury bonds, effectively restarting QE. **4\. Should You Go ALL IN on U.S. Stocks Again?** **From the above, Trump's Tariff 2.0 policy:** **1) Essentially taxes U.S. consumers and global producers. Its purpose is taxation for taxation's sake, fundamentally an economic suppressant. As the first pillar of Trump's economic policy, tariffs are a negative for both the U.S. and global economies.** **2) But the actual impact on the U.S. economy depends on how the revenue is spent and whether it's enough. This ties into Trump's second pillar—how much of the tariff revenue will fund domestic tax cuts and industrial policies to attract manufacturing reshoring?** **3) If funding needs are massive, will a compliant Fed facilitate financing? Could the U.S. shift from "independent fiscal + independent monetary" policies to "fiscal dominance + monetary accommodation"?** Otherwise, with federal leverage exhausted, households and businesses not leveraging up, and labor market dynamics weakening (each unemployed person now competes for just 1.02 jobs, similar to 2018 levels), the U.S. economy could easily slide into recession by late 2025 if job demand continues shrinking. **In short, while the May 12th tariff negotiations mark the worst of Sino-U.S. and global trade tensions, the U.S. still faces the challenge of rebuilding decades of hollowed-out manufacturing amid towering debt. Can this be solved cheaply with minimal financing?** **Given this uncertainty, Dolphin Research recommends diversifying investments across markets and asset classes rather than going all-in on dollar assets.** **Short-term, with Sino-U.S. trade tensions easing and the U.S. earnings season over, markets may rally further as no major negative surprises emerge.** **5\. Portfolio Adjustments and Performance** Last week, the Alpha Dolphin virtual portfolio made no adjustments. But with the U.S. earnings season concluded, Dolphin Research will gradually add stocks based on earnings and macro trends. Last week, the Alpha Dolphin portfolio gained 0.3%, underperforming the CSI 300 (+2%) and MSCI China (+0.5%) but outperforming the Hang Seng Tech Index (-1.2%) and S&P 500 (-0.5%). Since inception (March 25, 2022), the portfolio has delivered an 80% absolute return and an 80% excess return over MSCI China. The initial virtual assets of $100 million have grown to over $184 million as of last weekend. **6\. Individual Stock Performance** Last week, the Alpha Dolphin portfolio remained stable, though overall positioning is still light. Key movers are explained below: **7\. Asset Allocation** The Alpha Dolphin portfolio holds 10 stocks and equity ETFs, with one at standard weight and the rest underweight. Non-equity assets are mainly in gold, U.S. Treasuries, and cash. The light positioning reflects tariff uncertainty, but we're watching for potential buying opportunities in quality assets. As of last weekend, the allocation is as follows: **8\. This Week's Focus:** With the U.S. earnings season over, overseas Chinese asset earnings reports take center stage. Tencent, Alibaba, and others will report soon. Dolphin Research highlights key areas to watch: **Risk Disclosures and Disclaimers:** [**Dolphin Research Disclaimer and General Disclosures**](https://support.longbridge.global/topics/misc/dolphin-disclaimer) Recent Dolphin Research portfolio weekly reports: ["The Most Down-to-Earth Approach: Dolphin Investment Portfolio Goes Live"](https://longbridgeapp.com/topics/2764818?channel=t2764818&invite-code=032064) ### 相关股票 - [Tesla (TSLA.US)](https://longbridge.com/zh-CN/quote/TSLA.US.md) - [Trump Media & Tech - CW28 (DJTWW.US)](https://longbridge.com/zh-CN/quote/DJTWW.US.md) - [Pro UltrPro S&Pro 500 (UPRO.US)](https://longbridge.com/zh-CN/quote/UPRO.US.md) - [Hang Seng TECH Index (STECH.HK)](https://longbridge.com/zh-CN/quote/STECH.HK.md) - [Direxion FTSE China Bull 3X (YINN.US)](https://longbridge.com/zh-CN/quote/YINN.US.md) ## 评论 (18) - **爬山虎Yu · 2025-05-13T00:02:02.000Z**: Has the impact of the added tariffs been considered? Will it affect global consumption? - **Dolphin Research** (2025-05-13T08:21:40.000Z): It's still under negotiation, hard to tell how it will turn out in the end. - **鑫泓 · 2025-05-12T22:19:55.000Z**: Bullish on US stocks in the short term - **Jackson_ · 2025-05-12T15:30:46.000Z**: How to buy virtual portfolio, just follow the steps? - **传奇手游** (2025-05-12T16:59:40.000Z): Bro, wanna play Legend? - **Dolphin Research** (2025-05-13T02:05:51.000Z): The virtual portfolio is currently unavailable for purchase. We update the progress here every Monday. - **定投Time · 2025-05-12T14:18:22.000Z · 👍 2**: Emotional value can be played with in the short term,Long-term holdings should focus on corporate value,Prepare your bullets for good targets,Be a patient investor,Don't be a short-term day trader! - **mmmin** (2025-05-12T15:19:03.000Z): You are absolutely right - **淘气桃桃CiCi · 2025-05-12T13:51:29.000Z · 👍 1**: If the Fed doesn't cut rates, Trump will probably have to turn up the heat on Wall Street - **三块糖** (2025-05-12T15:28:45.000Z): Insightful women are rare - **Chandler Z** (2025-05-12T15:59:46.000Z): Agree - **Chandler Z** (2025-05-12T16:00:12.000Z): It's rare to see girls who follow politics and finance. - **淘气桃桃CiCi · 2025-05-12T13:48:43.000Z · 👍 2**: It's been seven years since the tariff war started in 2018. Doesn't Trump know that most manufacturing can't return to the US? He's not stupid. Besides shaking up countries worldwide, his big moves serve two purposes: first, to make money from US stocks (real income for himself), and second, to pres - **Mike Tofu** (2025-05-12T14:18:27.000Z): That's interesting - **小兵（冲锋版）** (2025-05-12T15:36:35.000Z): So how should we retail investors respond? - **淘气桃桃CiCi** (2025-05-12T15:39:06.000Z): It's better to wait and see for US stocks, or if you have the skills to outrun them, you can go for it. - **狗元 · 2025-05-12T13:32:33.000Z**: Can Dolphin Research share the current estimated increase in the proportion of risk assets?