Tech Stocks Set to Rise as US and China Pause Tariffs

Temporary Tariff Cuts Boost U.S. Tech Stocks

U.S. technology stocks, mirroring the overall market trend, were poised for a positive opening as the United States and China reached a temporary agreement to reduce reciprocal tariffs. This agreement was finalized on Monday.

Details of the Tariff Agreement

The agreement, negotiated in Geneva, involves a temporary suspension of certain tariffs by both nations. Specifically, the U.S. will temporarily reduce its 145% reciprocal tariff on Chinese goods to 30%.

Conversely, China will pause its 125% tax on goods originating from the U.S., lowering the rate to 10%. This reciprocal reduction is intended to foster a more stable trade environment.

Positive Market Reaction

Prior to the official market open, technology stocks experienced significant gains. Shares of Chinese exporters Temu and Alibaba, listed on the Nasdaq, saw an increase of almost 9% in pre-market trading.

Major U.S. tech companies with substantial operations in China, including Apple, Amazon, Tesla, Nvidia, AMD, and Meta, also benefited, with pre-market gains ranging from 5% to 6%.

Nasdaq Futures demonstrated a robust increase, rising approximately 3.8%.

Important Considerations

It is important to note that the current agreement does not address the U.S.’s recent decision to eliminate the “de minimis” exemption.

This exemption previously waived duties on imports with a value below $800. Its removal represents a separate trade policy change.