Tech Stocks Surge as US and China Agree to Temporary Tariff Pause

U.S. tech stocks are poised for a significant boost, mirroring broader market optimism, following an agreement between the United States and China to temporarily suspend reciprocal tariffs for a 90-day period. This truce offers a reprieve in the ongoing trade tensions, sparking renewed confidence among investors.

The agreement, brokered in Geneva, entails the U.S. temporarily halting the imposition of a 145% reciprocal tariff on goods imported from China, reducing it to 30%. Simultaneously, Beijing will pause its 125% tax on U.S. goods, lowering it to 10%. This mutual de-escalation aims to foster a more stable trading environment.

Pre-market trading reflected the positive sentiment, with shares of Chinese exporters Temu and Alibaba, both listed on the Nasdaq, soaring by nearly 9%. Major U.S. tech companies with substantial ties to China for sourcing and manufacturing also experienced gains. Apple, Amazon, Tesla, Nvidia, AMD, and Meta all saw their stock prices increase by 5% to 6% before the market opened. Nasdaq Futures indicated a rise of approximately 3.8%.

However, it’s important to note that the agreement does not address the U.S.’ recent decision to remove the “de minimis” exemption, which previously waived duties on imports valued below $800. This policy change could still impact certain cross-border transactions.

The temporary tariff pause is being viewed as a positive step toward de-escalating trade tensions between the two economic powerhouses. Whether it leads to a more comprehensive and lasting trade agreement remains to be seen, but the initial market reaction is undoubtedly optimistic for tech stocks.