US & China Extend Mutual Tariff Cuts for 90 More Days – What This Means for Markets

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The United States and China have agreed to extend their tariff truce until November 10, 2025, prolonging a pause that was due to end on August 12.

Key details from the deal:

Mutual tariffs cut to 10% for most goods.

A 20% tariff remains on goods tied to fentanyl exports from China.

US tariffs on Chinese goods slashed from 145% → 30%.

China’s tariffs on US goods reduced from 125% → 10%.

Why it matters for investors & traders:

Cheaper imports – Lower costs on electronics, machinery, and consumer goods could ease inflationary pressure in the US.

Boost for exporters – US agricultural, industrial, and tech exports to China become more competitive.

Stock market catalysts – Expect potential rallies in shipping, logistics, manufacturing, and commodity sectors.

Commodity impact – Soybeans, corn, and pork could see demand spikes; industrial metals may benefit from improved manufacturing sentiment.

Currency plays – The Chinese yuan (CNY) and US dollar (USD) could see short-term volatility as trade flows shift.

Trading takeaway:

Short-term: Positive sentiment for equities and commodities tied to US–China trade.

Medium-term: Watch for political volatility — the 90-day extension is temporary, and negotiations beyond November will be key.

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Now–Nov 5: Position for optimism — long trade-beneficiary stocks & commodities, long CNY and AUD/NZD against USD.
Nov 6–10: Start trimming positions or hedge with options — volatility will spike into the deadline.
Post-Nov 10: React to the outcome — breakout rallies if extended again, or sharp reversal if talks fail.

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Forex & Currency Plays

Likely Scenarios Pre-November:

    CNY/USD: Short-term yuan strength as trade optimism builds.

    AUD/USD & NZD/USD: Upside bias (commodity currencies tied to China demand).

    USD/JPY: Potential short-term weakness if global risk appetite improves.

Post-November Risk:

    Breakdown in talks → CNY drops, safe-haven flows back into USD & JPY.

    Deal extension or full resolution → CNY rally, risk-on pairs surge.