Understanding the US-China 90-Day Tariff Truce

Understanding how businesses are adjusting to the new trade dynamics.

The United States and China have announced a surprising agreement to sharply reduce tariffs between the two countries for a 90-day period. This temporary pause follows intensive weekend negotiations in Geneva and marks a major shift after months of escalating trade tensions. Under the agreement, the U.S. will reduce tariffs on Chinese imports from 145 percent to 30 percent, while China will lower its tariffs on U.S. goods from 125 percent to 10 percent. Both countries have also agreed to suspend many non-tariff barriers such as blacklists and import inspections.

Financial markets responded immediately. The S&P 500 rose by 3.3 percent, the Nasdaq increased by 4.3 percent, and global shipping stocks like Maersk jumped by double digits. In contrast, gold prices fell more than three percent, signaling a temporary move away from safe-haven assets as traders anticipated renewed cross-border activity.

For business leaders, this 90-day window brings a mix of opportunity and uncertainty. Founders and operators could see reduced manufacturing and shipping costs, providing a chance to replenish inventory or renegotiate contracts. Companies with international exposure may use this period to shore up their supply chains or test dormant logistics routes. Fintech and commerce firms could find it easier to resume paused international strategies. However, these benefits are tempered by the temporary nature of the deal.

The 90-day pause is significant in the sense that it creates an opening for both sides to reset relations and possibly pursue a more permanent resolution. Yet, if tariffs snap back to previous levels after the three-month period, the brief reprieve may do more harm than good. Supply chains cannot adapt easily to short-lived policy shifts. Restarting Chinese factories that were closed or operating at low capacity will take weeks, and reinstating raw material orders adds additional lead time. Many buyers, unsure of what lies ahead, may choose to front-load imports before the deadline, which could strain freight capacity and distort pricing. Meanwhile, the base 30 percent tariff is still quite high, meaning that even resumed trade will be expensive and selective.

Ultimately, the temporary nature of the deal offers little reassurance to long-term planners. A 90-day agreement does not provide the predictability needed for capital investment, labor decisions, or product development. Instead, it encourages businesses to hoard inventory if they can afford it, delay strategic moves, and adopt a cautious wait-and-see stance. The question remains whether this ceasefire leads to lasting change or is simply a brief pause before the next escalation. If the tariffs return after 90 days, the economic dislocation and uncertainty could intensify rather than ease.