Global Markets Surge as US-China Tariff Truce Sparks Optimism, But Long-Term Stability in Question

 

By Emma Clarke | International Business Correspondent

NEW YORK/BEIJING — Global financial markets soared on Monday as the United States and China announced a temporary pause in their long-running tariff war, signaling a potential thaw in relations between the world’s two largest economies. The announcement led to sharp rallies across major stock exchanges. The Dow Jones Industrial Average closed up 1.7%, the S&P 500 climbed 1.9%, and the Nasdaq gained 2.3%. European indexes mirrored the gains, with London’s FTSE 100 rising 1.4% and Germany’s DAX jumping 1.6%. In Asia, China’s Shanghai Composite Index posted a 2.2% increase, while Japan’s Nikkei 225 advanced 1.8%.

The surge followed a weekend joint statement from Washington and Beijing confirming that both sides would suspend any new tariffs and resume negotiations on trade and technology disputes. This comes after months of heightened tension, with businesses and consumers bearing the brunt of the economic fallout. Investors reacted positively, interpreting the move as a gesture of goodwill that could prevent further deterioration in global commerce.

The agreement, while temporary, includes a six-month freeze on any new tariffs, the resumption of formal trade talks, and a commitment from both nations to improve transparency in trade practices. Notably, the U.S. has agreed to relax certain restrictions on tech exports to China during this period. U.S. Treasury Secretary Janet Yellen praised the decision, calling it “a step toward a more stable and predictable economic relationship,” while Chinese Vice Premier Liu He stated that the truce is “a responsible act that benefits both nations and the world.”

However, experts remain cautious. Economists and trade analysts warn that the key issues at the heart of the conflict—ranging from intellectual property protection to market access and control over advanced technology—have not been resolved. “This isn’t a peace treaty—it’s more like a ceasefire,” said Professor Henry Tan of the University of Singapore. “The structural tensions, particularly in advanced technology and semiconductors, could reignite conflict.”

Corporate leaders welcomed the news with cautious optimism. Apple Inc., which relies heavily on Chinese manufacturing, issued a statement supporting any progress that eases trade tensions. The American Chamber of Commerce in China urged both sides to pursue “permanent and enforceable solutions” that offer stability for global businesses. Smaller exporters also expressed hope, though some remain skeptical based on past experiences. “We’ve seen these pauses before, only to get hit with surprise tariffs later,” said Sandra Wilkins, CEO of a U.S. Midwest agricultural company. “We need certainty, not just headlines.”

Negotiations are scheduled to resume next month in Geneva under the supervision of the World Trade Organization. The global business community will be watching closely to see whether this temporary truce leads to a more durable agreement. In the meantime, analysts advise caution, noting that inflation, corporate earnings, and central bank policies will continue to influence market volatility. While this breakthrough has brought temporary relief, the coming months will determine whether it marks a genuine turning point or merely a pause before the next escalation.