A 90-day suspension of escalating tariffs between the US and China is expected to reset short-term investor expectations and market positioning, although insurance sectors – particularly in China – face lingering risks from the broader trade conflict.
Announced on May 13, the temporary trade agreement includes a rollback of significant duties imposed during the prolonged tariff standoff. The US will reduce levies on Chinese imports from 145% to 30%, while China will cut its tariffs on US goods from 125% to 10%.
While not a permanent resolution, the truce introduces near-term stability that global markets had been lacking.
Financial markets responded swiftly. Asian indices such as the Nikkei and Hang Seng posted early gains, while futures markets in the US and Europe also turned positive.
Meanwhile, commodity markets and emerging currencies rebounded, signaling renewed confidence among investors in trade-linked assets.
Nigel Green (pictured), CEO of the international advisory firm deVere Group, said the policy shift marks a recalibration point for market participants.
“This truce opens the door to renewed trade flows, softer inflation pressures, and stronger company earnings, especially in sectors that were bearing the brunt of the tariff war,” he said.
He noted that sectors previously affected by high tariffs – such as global logistics, industrials, and manufacturing – stand to benefit in the short term.
“Capital is coming off the sidelines, and investors are rotating back into equities with exposure to global trade, logistics, and manufacturing,” Green said.
The tariff truce comes on the back of industry analyses pointing to financial pressures emerging in China’s insurance sector, especially in light of earlier US tariff actions.
The announcement follows closely behind a separate US-UK trade development in which the UK reduced its tariffs on American goods from 5.1% to 1.8%, while the US maintained its 10% rate.
That move also expanded market access for US exports and was seen as an indicator of softening trade policies more broadly.
Risk assets have rallied in parallel. Cryptocurrencies, often seen as barometers of investor sentiment, experienced significant surges. Bitcoin rose past the US$100,000 mark for the first time since February, and Ether recorded a 14% gain.
Green said this reflects a broader return to growth-focused positioning.
“This kind of coordinated tariff relief, even if temporary, changes the investment landscape,” he said. “It clears a path for businesses to recalibrate their outlook and for markets to rally on something more than just hope.”
