## Trump's China Trade Truce Extension Sparks Global Market Rally **Report Provider:** The Guardian **Author:** Lauren Almeida **Date:** August 12, 2025 This report details how President Donald Trump's decision to extend a truce in the trade war with China has led to a significant rally in global stock markets. ### Key Developments: * **Truce Extension:** On Monday night, President Trump signed an executive order extending the deadline for higher tariffs on China until **November 10**. * **China's Response:** Beijing announced early Tuesday that it would suspend additional tariffs on US goods for a further **90 days**. * **Market Reaction:** This development triggered a positive market response, with expectations growing for a potential trade agreement between the US and China within this extended pause. ### Market Performance: * **Japan:** Tokyo's Nikkei share index surged by as much as **2.5%** to **42,867.69 points** on Tuesday, reaching record highs. * **Australia:** The Australian ASX 200 index rose by **0.14%**, hitting a high of **8,828.67**. This momentum was also supported by the Reserve Bank of Australia cutting its main interest rate to a two-year low of **3.6%**. * **China:** The Shanghai composite index saw a rise of **0.5%**. * **Hong Kong:** The Hang Seng index remained broadly flat. ### Trade War Context and Potential Risks: * **Previous Threats:** President Trump had previously threatened tariff rates as high as **245%** on Chinese imports, while Beijing had threatened retaliatory tariffs of **125%**. * **Current Tariffs:** Under existing rules, US exports to China face rates of approximately **30%**. Imports from China are subject to a baseline tariff of **10%**, with an additional **20%** tariff related to fentanyl smuggling allegations. * **Economic Concerns:** Economists have warned that the trade war, particularly against China, could severely damage the global economic outlook by increasing costs, disrupting supply chains, and reducing international trade. ### Oil Prices: * **De-escalation Hopes:** Oil prices also saw an increase on Tuesday, fueled by optimism that the trade war could de-escalate. * **Brent Crude:** Brent crude futures rose by **0.4%** to **$66.90 a barrel**. * **West Texas Intermediate (WTI):** US West Texas Intermediate crude futures increased by **0.4%** to **$64.20**.
Trump’s China trade truce extension spurs market rally
Read original at The Guardian →Donald Trump’s decision to extend a truce in the trade war with China has triggered a stock market rally across the globe.On Monday night, the US president signed an executive order extending the deadline for higher tariffs on China until 10 November. Beijing said early on Tuesday it would suspend additional tariffs on US goods for a further 90 days.
In response, markets in Japan and Australia hit record highs on Tuesday, as expectations grow that the US and China could secure a trade agreement before the end of another 90-day pause on additional tariffs.Tokyo’s Nikkei share index rose by as much as 2.5% to 42,867.69 points on Tuesday, while the Australian ASX 200 index was up by 0.
14%, reaching a high of 8,828,67. Its momentum was helped by the Reserve Bank of Australia cutting its main interest rate to a two-year low of 3.6%.In China, the Shanghai composite index rose by 0.5%. Hong Kong’s Hang Seng index remained broadly flat.Investors are hoping that negotiators will be able to secure a trade deal during the pause on additional tariffs.
Trump has previously threatened tariff rates as high as 245% on Chinese imports, while Beijing has threatened retaliatory tariffs of 125%.Under current rules, US exports to China are subject to rates of about 30%, with imports from China subject to a baseline tariff of 10%, as well as a 20% extra tariff related to fentanyl smuggling allegations against China.
US exports to China are subject to tariffs of about 30%.Economists have warned that Trump’s trade war regime, especially against China, could seriously damage the global economic outlook, as it could lead to higher costs, disrupt supply chains and reduce international trade.Oil prices also rose on Tuesday amid hopes the trade war could de-escalate.
Brent crude futures rose by 0.4% to $66.90 a barrel, while US West Texas Intermediate crude futures rose by 0.4% to $64.20.
