The US and China have been locked in a trade war for years, with tariffs, restrictions and tensions hurting businesses and consumers. Recently a 90 day truce between the two nations has brought some relief to global markets. This temporary pause in the trade conflict has boosted stock markets affected iPhone exports and raised hopes among business leaders. However concerns about inflation and stagflation remain.
The 90 Day Truce and Market Reactions
The announcement of a 90 day truce in the US-China trade war has given markets a reason to cheer. During this period both countries have agreed to pause new tariffs and negotiate a possible deal. This news has lifted investor confidence as trade wars often create uncertainty that scares markets. The S&P 500 a major US stock market index has erased all its losses for 2025 showing how much this truce matters to investors.
Why are markets so happy? Tariffs which are taxes on imported goods make products more expensive and disrupt businesses. When the US and China impose tariffs on each other companies face higher costs and consumers pay more for goods. The truce signals a chance for both sides to find common ground reducing these costs for now. Investors hope this could lead to a longer term solution though no one is sure what will happen after the 90 days.
China’s iPhone Exports Hit a 14-Year Low
One major effect of the trade war is the drop in China’s iPhone exports to the US. These exports have fallen to their lowest level in 14 years due to tariff tensions. The US has imposed tariffs on Chinese electronics making it harder for companies like Apple to bring iPhones from China to American consumers. This has disrupted the global supply chain which is the network of companies that produce and deliver goods worldwide.
China is a major hub for manufacturing iPhones but tariffs have forced companies to rethink their strategies. Some are moving production to other countries like India or Vietnam to avoid US tariffs. This shift is costly and takes time affecting Apple’s supply chain and raising prices for consumers. The drop in iPhone exports also hurts Chinese factories and workers as fewer orders mean less work.
Global Supply Chain Challenges
The US-China trade war does not just affect these two countries—it impacts the entire world. Global supply chains are like a web connecting manufacturers, suppliers and consumers across countries. When tariffs disrupt this web companies face delays, higher costs and uncertainty. For example if Apple can’t get enough iPhones from China stores in the US and other countries may face shortages, and prices could rise.
Other industries, like cars, clothing and electronics are also affected. Many products rely on parts made in China and tariffs make these parts more expensive. Companies may pass these costs to consumers leading to higher prices for everyday items. The truce offers a temporary break but businesses are still cautious. They know the trade war could heat up again if negotiations fail.
CEOs Welcome the Truce but Worries Remain
Business leaders are relieved by the truce. CEOs of major companies like those in tech and manufacturing see it as a chance to stabilize their operations. Tariffs have made planning difficult as companies don’t know how much their costs will rise or if they will need to move factories. The 90 day pause gives them time to prepare and hope for a better deal.
However not everyone is optimistic. Jamie Dimon the CEO of JPMorgan has warned about inflation and stagflation. Inflation happens when prices rise making goods and services more expensive. Stagflation is worse it’s when inflation rises but the economy grows slowly or not at all. This is a scary combination because it means people pay more for things while jobs and wages stagnate. Dimon’s concerns show that even with the truce the trade war’s effects could linger.
What’s Next for the US, China, and the World?
The 90 day truce is a step forward but it’s not a permanent fix. The US and China have deep disagreements over trade, technology and economic policies. Negotiations during this period will be critical. If they reach a deal it could ease tensions, lower tariffs and stabilize markets. But if talks fail the trade war could escalate leading to more tariffs and economic pain.
For consumers the truce might keep prices stable for now. However if tariffs return everyday items like phones, clothes and cars could get pricier. Businesses will need to keep adapting possibly moving more production out of China. This could create jobs in other countries but might hurt Chinese workers and factories.
The global economy is at a crossroads. The truce has given markets a boost and offered hope to businesses but the risk of inflation and stagflation looms large. The next 90 days will be crucial in deciding whether the US and China can find a way to work together or if the trade war will continue to disrupt the world.
Conclusion
The US-China trade truce has brought temporary relief to markets with the S&P 500 recovering its 2025 losses. However the drop in China’s iPhone exports and supply chain challenges show the trade wars deep impact. While CEOs welcome the pause concerns about inflation and stagflation remind us that the future is uncertain. The world is watching as the US and China negotiate hoping for a deal that benefits everyone.