General Joseph Dunford (L), president of American staff leaders, and leader of the General Staff … more
The US and China have reached an agreement to prevent unusual high invoices in each other’s countries. Stock markets responded positively to the news. While the reduction in invoices is likely to reduce the immediate impact on companies, the largest positive result that leads to increased stock markets may be in the lowest uncertainty that these companies are now facing as they are directed to the next phase of this continuing trade war.
On May 11, 2025, President Donald Trump announced In X via the White House account that a trade agreement had been reached with China. While the details are still resolved, NBC News Reports The fact that the agreement entails Chinese import invoices will be reduced from 145% to 30%. In the meantime, Chinese invoices on US imports will be reduced from 125% to 10%.
The news of this Agreement has sent the global stock markets upward, led by the future of the US stock markets on the morning of 5/12/2025 (from 9:00 am east) to 2.68%, 3.16%and 4.03%for DOW, S&P and P and Nasdaq, respectively. As I have discussed in the Forbes in the past, there are three reasons why Trump’s mutual invoices imported on the release of a tank release in stock markets:
- Reduced future revenue for companies
- Other countries imposed mutual invoices
- Increased uncertainty of stock market
This announcement of a trade agreement with China that will be reversed by many of the invoices is directly addressing all three of these concerns. However, the most dramatic outcome, which may be the primary reason for the dramatic recovery of the stock market, may be related to the third point of uncertainty resolution.
US-China Commercial War continued Over three monthsStarting on February 1, when Trump first imposed the 10% invoice on all Chinese imports. China then responded with a 15% invoice to many US products. Countries continued to go ahead and back until April 2 (release day), when Trump increased the invoice to Chinese imports to 54%. Even a week later, when Trump issued a 90 -day pause on all imports invoices, instead of reducing invoices for China, they doubled their mission to throw them to 145%.
This constant change in duty policy has led many executives to feel a sense of uncertainty. THE New York Times reports These CEOs have been paralyzed by their inability to predict what the future will keep for their capacity and costs of attracting goods, accessories and machinery in the US in the meantime, Washington Post is documented That small business owners have gotten that they simply cannot keep up with the cost of invoices and that they have to deal with the storm means they should consider whether it is a better business decision to close the store.
Business leaders from around the world have already welcomed the US and China that are coming to a trade agreement. As mentioned by ReutersSheldon MacDonald, the Cio of Marlborough in London, said: “The market will see this as a confirmation that Trump does not really want to cause the previously disturbing disorder.” They also say that Zhiwei Zhang, head of asset management economist, said: “Obviously, this is very positive for economies in both countries and the global economy and makes investors much less worried about the damage to global supply chains.”
A key part of this is the idea that Trump seems ready and willing to come to the negotiating table to solve some of the uncertainty about US invoices. China has long been seen as a dominant player and among the very few countries who took a stand against Trump’s invoices announced on the day of liberation. If an agreement can be made between the US and China, then there is a renewed optimism that an agreement between the US and any country could be made.
A basic warning in this Agreement is that it only lasts 90 days. This temporary agreement means that the two sides will have to continue their talks over the next three months to prevent the production of the World War War. In the meantime, it seems that uncertainty has been resolved, which stock investors believe will help in the positive impact on the whole US economy.
