Trump China tariff truce ignites stock markets, will political payoff follow?

Global stock markets are on a bullish streak following the recent trade truce between the United States and China. The agreement, which was announced early Monday, marks a 90-day cooling-off period between the two economic superpowers and brings a temporary halt to their tariff war that had triggered a significant financial market sell-off last month.

Under the terms of the truce, U.S. tariffs on Chinese imports have been reduced from 145% to 30%, while Beijing has lowered its retaliatory tariffs from 125% to just 10%. Treasury Secretary Scott Bessent expressed optimism about the agreement, stating that both countries have an interest in balanced trade and that the U.S. will continue to move towards that goal.

The initial relief provided by the trade truce has had a positive impact on the stock markets. However, for President Donald Trump, who is looking to pass a comprehensive agenda through Congress and maintain his congressional majorities in the upcoming midterm elections, the potential political benefits of the agreement may be the most crucial aspect.

The truce with China comes on the heels of a recent trade deal with the United Kingdom, which was the first agreement since the implementation of tariffs last month. President Trump has indicated that the deal with London is just the beginning of many more to come.

With his approval ratings slipping in recent months, particularly in terms of the economy and inflation, President Trump is looking to capitalize on the positive momentum generated by the trade truce. The president’s approval ratings currently stand at 44%, with concerns over the economy and inflation playing a significant role in shaping public opinion.

Following his tariff announcement in April, which sparked a trade war and market sell-off, President Trump now has an opportunity to demonstrate tangible results. The tariff truce with China represents a step in the right direction and could potentially give the president a much-needed political boost.

As President Trump works to secure more trade deals and strengthen the economy, the recent agreements with China and the United Kingdom serve as positive indicators of progress. With more deals on the horizon, the president will need to continue to deliver on his promises in order to maintain public support and secure his agenda.