• US and China slash tariffs, creating a 90-day window for businesses and investors.
• Global tech and consumer goods companies like Tesla and Apple could see significant cost benefits.
• The temporary 90-day window creates short-term opportunities for operationally agile firms.
• Key investment risks include political reversal, currency volatility, and the short 90-day timeframe.

A 90-Day Truce in the Trade War? Let's Not Get Carried Away

Just when you thought global politics couldn't get any more unpredictable, Washington and Beijing decide to play nice. After years of throwing economic punches at each other, they’ve suddenly announced a dramatic, albeit temporary, ceasefire in their trade war. US tariffs have been slashed from a frankly absurd 145% down to 30%, while China has reciprocated, cutting its own from 125% to a mere 10%. My first thought? It all seems a bit too convenient.

When two giants who have spent the better part of a decade in a staring contest suddenly start shaking hands, a healthy dose of British cynicism is not just warranted, it’s essential. This isn’t a peace treaty. It’s a 90-day experiment, a political trial balloon to see what happens. For investors, this creates a fascinating, if treacherous, landscape.

The Usual Suspects Take Their Positions

Of course, the moment the news broke, everyone’s eyes turned to the big names. You have companies like Apple, which has built a global empire on the back of Chinese manufacturing. For them, lower tariffs could mean healthier margins and fewer supply chain headaches, at least for a little while. Then there’s Tesla, with its colossal factory in Shanghai. Cheaper cross-border trade could make its Chinese-made cars more competitive on the world stage.

On the other side of the Pacific, you have giants like Alibaba. Lower US tariffs could make it easier for them to sell Chinese goods to American consumers, breathing new life into their international ambitions. These companies are the obvious players because they have spent years navigating the trade war. They are battle-hardened, with the infrastructure in place to potentially capitalise on this brief thaw. They don’t need to build anything new, they just need to flick a switch.

A High-Stakes Audition

Let’s be perfectly clear about what this is. This 90-day window, running until mid-August 2025, is an audition. Both governments are watching closely to see if easing trade friction can stimulate their economies without causing a political firestorm at home. It’s a test to see which companies can move fastest and demonstrate the benefits of open trade.

This creates a very specific type of opportunity, one that favours agility and existing scale over long-term strategy. It’s a high-stakes game, and some investors are looking at specific collections of stocks, like the US & China Slash Tariffs to Boost Trade basket, to try and navigate it. The logic is to focus on the firms best positioned to benefit from this very specific, time-limited scenario. But remember, all investing carries risk, and a temporary political truce is about as risky as it gets.

The Inevitable Risks and Realities

I wouldn’t be doing my job if I didn’t pour a little cold water on the excitement. First, this is a political decision, which means it can be reversed on a whim. A single tweet or a fiery press conference could send tariffs snapping right back to their previous levels, leaving any company that overcommitted dangerously exposed.

Then there’s the small matter of currency. The dance between the dollar and the yuan could easily wipe out any cost savings from lower tariffs. A strong dollar might make Chinese goods more expensive for Americans, regardless of the tariff rate. Supply chain managers also face a terrible dilemma. Do they reroute everything back through the old US-China channels for a potential three-month gain, or do they stick with the diversified, more expensive routes they painstakingly built to survive the trade war in the first place? There’s no easy answer. This isn’t a simple case of lower costs equals higher profits. It’s a complex puzzle with many moving parts, and the clock is ticking.

Deep Dive

Market & Opportunity

• US tariffs on Chinese goods have been reduced from 145% to 30%.
• Chinese tariffs on US goods have been reduced from 125% to 10%.
• These new tariff rates are in effect for a 90-day period, ending in mid-August 2025.
• The policy change creates a temporary window for companies with established cross-border operations to potentially benefit.

Key Companies

• Tesla Motors, Inc. (TSLA): An electric vehicle company with significant manufacturing operations in China. Lower tariffs could reduce production costs and increase the competitiveness of its Chinese-made vehicles in global markets.
• Apple (AAPL): A technology company that relies heavily on Chinese manufacturing for its global supply chain. Reduced trade barriers could ease supply chain pressures and improve profit margins.
• Alibaba Group (BABA): A Chinese e-commerce company expanding internationally. Lower US tariffs could make Chinese products on its platforms more appealing to American consumers.

Primary Risk Factors

• Temporary Nature: The tariff reductions are only guaranteed for a 90-day window, creating uncertainty about what happens afterward.
• Political Reversal: Domestic political pressure in either the US or China could cause the governments to reverse the tariff cuts unexpectedly.
• Currency Volatility: Fluctuations in the dollar-yuan exchange rate could offset or eliminate the cost savings from lower tariffs.
• Execution Risk: Companies may struggle to adjust their supply chains and operations quickly enough to capitalize within the short 90-day timeframe.

Growth Catalysts

• Established Infrastructure: Companies with existing manufacturing and supply chains in both regions are positioned to benefit immediately without needing to build new operations.
• Operational Agility: Firms with flexible supply chains can pivot quickly to take advantage of the lower costs.
• Positive Precedent: Strong economic performance during this 90-day window could provide a case for making the lower tariffs permanent.