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U.S. Aviation Sector Soars 10% as China-U.S. Trade Tensions Ease

Word on the StreetTuesday, May 13, 2025 12:03 pm ET

1min read

On Tuesday morning, the U.S. Eastern Time, the U.S. aviation sector saw widespread gains following the agreement between China and the U.S. to temporarily suspend most tariffs, easing trade tensions. This development comes as the U.S. government announced plans to invest "hundreds of billions of dollars" in upgrading its air traffic control system, further bolstering the aviation industry. The backdrop to this investment includes several recent major aviation accidents in the U.S.

From May 10 to 11, China and the U.S. held high-level economic and trade talks in Geneva, Switzerland. The talks resulted in several significant agreements and substantial progress. On May 12, both sides issued the "China-U.S. Geneva Economic and Trade Talks Joint Statement." The international community closely followed these talks, with widespread recognition that they had a positive impact on global markets and represented a significant step in the right direction.

The talks concluded with both sides expressing satisfaction with the outcomes. China's lead negotiator, Vice Premier He Lifeng, described the discussions as candid, in-depth, and constructive, resulting in important consensus and substantial progress. Both sides agreed to establish a China-U.S. economic and trade consultation mechanism. U.S. Treasury Secretary Janet Yellen also noted that the talks had achieved significant progress and were "productive."

The positive outcomes of the Geneva talks were seen as a relief to investors, who had been concerned about potential disruptions to the global supply chain. The agreements reached during the talks provided greater certainty for the market, reducing short-term worries about global economic downturns. The progress made in the talks was seen as a positive sign for both countries' economies and the global economy as a whole.

The aviation sector, in particular, benefited from the easing of trade tensions. The U.S. government's plans to invest in upgrading its air traffic control system further supported the industry, which had been impacted by recent aviation accidents. The combination of reduced trade tensions and increased investment in aviation infrastructure provided a boost to the sector, leading to widespread gains in the U.S. aviation market.

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