China-US Suspend 24% Tariffs! 90-Day Grace Period Brings Economic Windfall

I. Policy Highlights  

On May 12, the China-US Geneva Trade Talks Joint Statement announced substantial progress:  

- The U.S. will remove 91% of additional tariffs imposed on Chinese goods  

- China will reciprocate by lifting 91% of retaliatory tariffs  

- Both sides temporarily suspend 24% of "reciprocal tariffs"  

II. Key Impacts  

1. Short-term relief:  

Peak tariff rates drop from 145% (U.S.) and 125% (China) to 34% bilaterally. This significantly reduces trade costs, creating greater profit margins and market opportunities for import/export businesses.  

2. Long-term dynamics:  

The 90-day window serves as a critical negotiation period. Failure to reach agreement may reinstate the suspended 24% tariffs, potentially re-escalating trade tensions. Both nations maintain 10% baseline tariffs, indicating ongoing strategic tensions.  

III. Market Outlook  

1. Beneficiary sectors:  

- Chinese exporters (electronics, textiles, furniture) may see increased overseas orders and expanded profitability  

- Related stocks and corporate earnings could rally  

- Trade recovery may boost employment in manufacturing, logistics, and cross-border e-commerce, particularly in coastal regions  

- Improved exports coupled with lower import costs may temporarily widen trade surplus and stabilize forex reserves  

2. Risk advisory:  

While former President Trump called 145% tariffs "unsustainable," failure in negotiations could trigger their return. Businesses should prepare contingency supply chain plans against potential policy reversals when the 90-day suspension expires.