The tariff conflict between the USA and China has caused significant uncertainties in global markets over the past few years. Recent developments, however, show signs of de-escalation, which are positively received by market participants and have the potential to significantly influence future market developments.
Current Developments in the Trade Conflict
Tariff Increases and Retaliatory Tariffs: In Spring 2025, the USA imposed punitive tariffs on Chinese imports of up to 145 percent. China responded with its own tariffs on US imports of up to 125 percent.
Temporary Tariff Reductions: In May 2025, both sides agreed to significantly reduce their mutual tariffs for an initial period of 90 days: US tariffs dropped to about 30 percent (down from up to 145 percent), while China’s tariffs fell from up to 125 percent to around 10 percent.
Talks and Consultations: After a meeting of delegations from both countries in Geneva, a mechanism for regular consultations on economic and trade issues was established. Both sides signaled progress, although no specific details were released.
Signs of De-escalation
Selective Tariff Exemptions: At the end of April, China began exempting certain US products from the higher tariff rate. This particularly concerns goods that are hard to replace for Chinese companies or that would endanger their supply chains.
Corporate Perspective: According to the American Chamber of Commerce in China, some member companies were no longer burdened by the new tariffs. Particularly affected were pharmaceutical companies and businesses with specialized imported goods.
Market Impacts
The hope for further de-escalation in the trade conflict is viewed positively in the financial markets:
- Market Reaction: Following the announcement of the temporary reduction of mutual tariffs, for example, the share prices of major logistics companies like Maersk rose significantly.
- Global Economic Significance: As the USA and China are the two largest economies, any rapprochement has a direct positive impact on global supply chains and investor sentiment.
- Future Development Potential: If it is possible to establish a permanent dialogue mechanism or even achieve further concessions regarding trade barriers, this could provide sustainably positive impulses for growth and stability.
Outlook
Despite current progress, the relationship between the two countries remains tense:
- Further Talks Planned: New high-level talks have been announced for early June; senior representatives from both countries are set to meet.
- Technology as Another Source of Conflict: In addition to traditional trade issues, the dispute over high-tech chips remains – an area where both sides continue to try to assert their interests.
Overall, it shows: any rapprochement in the trade dispute is regarded as an important step towards stabilizing global trade. The markets react sensitively – positive signals lead immediately to price increases in affected sectors such as logistics or technology. A lasting breakthrough would be crucial for future market developments worldwide.