Big Tech finds relief in the U.S.-China tariff war's 90-day pause
The truce marks a de-escalation between the world’s two biggest economies.
The tariff that had Big Tech scrambling, supply chains unravelling, and prices climbing just got slashed.
In a dramatic move that shook global markets Monday, the U.S. and China agreed to a 90-day pause in their trade war, cutting sky-high tariffs that had threatened to choke off electronics production and send inflation soaring.
Emmanuel Oyedeji
The deal, reached during negotiations in Geneva, reduces U.S. tariffs on Chinese imports from a staggering 145% to 30%. China will cut its levies on U.S. goods from 125% to 10%.
The 30% U.S. tariff still includes a 20% duty tied to Chinese fentanyl-related issues and a 10% universal tariff on nearly all imports—a policy Trump imposed in his second term. But it’s a dramatic improvement from recent extremes, which had some Chinese goods taxed as high as 245%.
April’s Tariff Shock
The announcement follows weeks of economic tension and corporate panic. In the earlier weeks of April, the U.S. had imposed sweeping new tariffs, reaching as high as 245% on some Chinese goods, as part of a broader trade crackdown that included multiple countries. Most allies received a 90-day grace period. China didn’t. That decision sent shockwaves through the tech industry.
Tech giants like Apple, Google, Dell, and Microsoft—deeply reliant on Chinese manufacturing—had rushed to ship inventory before deadlines hit. They also scrambled to shift production to India and Southeast Asia with lower reciprocal tariffs.
Meanwhile, Amazon cancelled orders. Nintendo temporarily froze pre-orders. Chipmakers like Nvidia, Intel, and others began restructuring global supply chains. Taiwan’s TSMC also began exploring accelerated U.S. factory plans.
It didn't stop there. The disruption made its way to Wall Street. Uncertainty dominated Q1 2025 earnings reports. Several major firms revised guidance downward or withheld it entirely, citing tariff volatility and geopolitical risk.
Emmanuel Oyedeji
Markets Exhale
However, the 90-day pause brings much-needed relief for trade tensions. Now, markets are breathing again.
Financial markets soared on the news. The Dow Jones Industrial Average gained 951 points, while the S&P 500 rose 2.6%, nearing its all-time high from February 2025. In Asia, Chinese tech stocks rallied, with Alibaba jumping 5.7%, driven by both the tariff relief and investor excitement around its pivot toward AI.
Analysts described the move as the start of broader negotiations—a huge win for the market and a bullish signal for 2025.
Caution Remains
But despite the positive headlines, concerns remain. Though the agreement eases short-term pressure, many analysts are sceptical about its long-term durability. Trade tensions, tech competition, and national security concerns remain unresolved and could resurface at any time.
U.S. Federal Reserve Governor Adriana Kugler warned that even the reduced tariff levels are well above historical norms and could continue to weigh on the economy. These rates could still slow growth and contribute to inflation. Higher costs will likely be passed on to consumers.
For now, though, the deal brings short-term relief. Prices for electronics could stabilise, and supply chain pressures may ease. The full impact on consumer prices will be something to watch in the coming weeks.
