Markets Soar as US-China Tariff Truce Defuses Trade War Bomb

Wall Street and crypto rejoice as economic doomsday clock gets reset—for now.

Subheader: Bulls Charge as Tariff Ceasefire Unlocks Risk-On Mode

The détente sends Bitcoin flirting with $70K while DeFi tokens rally—because nothing says ’hedge against fiat’ like politicians pretending to play nice. Traders pile into altcoins as liquidity floods back, though sharp-eyed cynics note the ’agreement’ is 90% press release and 10% actual policy change. Classic ’buy the rumor, sell the news’ setup—but hey, those leveraged longs won’t liquidate themselves.

Global Trade War

After the massive tariff rates at the beginning of April, the first deal with the UK was signed recently. By Saturday, a temporary agreement with China was also reached. Even though negotiations continue with 200 countries, the rapid progress with China sparked expectations in markets that the tariff issue could be resolved. As we stand today, Bitcoin$104,310 hovers around $104,000, and altcoins are attempting to recover from their losses.

The Joint Declaration of the US-China Economic and Trade Meeting on May 12th in Geneva highlighted significant progress between the two nations. However, a permanent agreement is yet to be reached, and Fitch Ratings suggests this continues to fuel uncertainty.

An announcement stated, “The US is delaying the 90-day 34% reciprocity rate imposed on Chinese imports on April 2nd and revoking the decision to increase this rate to 125% announced on April 8th-9th. Both governments will reduce total bilateral customs duties by 115 points. Thus, the US tariffs on imports from China will drop to 30% and China’s tariffs on US imports will decrease to 10%.”

China announced today that the new rates WOULD take effect tomorrow. Triple-digit tariff rates had halted trade, and the latest rates are considered acceptable in the negotiation process.

Is the Trade War Over?

Following the rates in April, the 2025 global GDP forecast fell to 1.9%. Recent agreements have reduced the US’s effective tariff rate from 23% to 13%. In 2024, this rate was at 2.3%, indicating the current US effective tariff rate (ETR) remains significantly high. US Treasury Secretary Scott Bessent does not suggest zeroing out the rates.

Thus, if ending the trade war implies zeroing out rates, it will not happen. Scott Bessent stated that the rates are beneficial for economic decoupling, aiming to reduce US dependency on Chinese imports.

Therefore, as negotiations over reduced rates continue between the two countries, global trade may suffer but won’t receive a fatal blow. This counters narratives predicting an end to global trade post-World War II. The current scenario is highly supportive of cryptocurrencies, and further, China should commit to establishing significant production facilities in the US.

As Trump calls for another interest rate cut during this write-up;

“There’s no inflation, and prices for Gas, Energy, Groceries, and almost everything else dropped!!! The Fed should cut interest rates, like Europe and China. What’s with ‘Always Delayed Powell’? Not fair for an America ready to bloom.”