What the Trade Détente Means for Investors

Treasury Secretary Scott Bessent didn’t return from Switzerland and proclaim “Trade peace in our time” while waving a piece of paper. Instead, the interim deal represented a signal toward a trade détente and the acknowledgement that China is an equal in global trade with the U.S.

The agreement. lowered the U.S. tariff on Chinese imports from 145% to 30% for 90 days. China reciprocated by lowering its tariffs on U.S. imports to 10%. Shipping bookings skyrocketed in response and the deal took the tail-risk of a recession off the table.
 

It’s no surprise that the stock market rallied.
 

Before you become overly excited, analysis from the Budget Lab at Yale found that the average effective tariff rate is now 17.8% pre-substitution for high-priced imports and 16.4% post-substitution, which are still very high by historical standards.

Here’s what the trade détente means for investors.
 

The full post can be found here.

 

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