Navigating the U.S.-China Trade Truce: Near-Term Opportunities in a Volatile Landscape

The fragile 90-day tariff truce between the U.S. and China, effective since May 14, 2025, has injected a flicker of hope into markets rattled by years of trade tensions. Yet, with overlapping tariffs, diplomatic stalemates, and looming deadlines, the path forward remains fraught with uncertainty. For investors, this volatility presents a critical moment to identify sectors poised to capitalize on shifting dynamics. Below, we dissect the opportunities—and risks—in industries at the center of this geopolitical chess match.

Agriculture: Betting on a Soft Landing

China's retaliatory tariffs on U.S. agricultural goods—such as soybeans, pork, and wheat—have slashed trade volumes by over 40% since 2020. However, the temporary tariff reduction offers a reprieve. If the truce is extended beyond its August 2025 expiration, or if bilateral talks yield a broader agreement, U.S. farmers and agribusinesses could see a swift rebound.

Investors tracking these companies may notice a correlation between tariff fluctuations and stock volatility. A prolonged truce could stabilize prices, favoring firms with diversified supply chains or direct access to Chinese markets.

Semiconductors: Navigating Tech Restrictions

The U.S. has doubled down on export controls for advanced AI chips, while China's retaliatory tariffs on U.S. semiconductors remain at 50%. Yet, the sector holds hidden opportunities. U.S. firms like Applied Materials (AMAT) and Lam Research (LRCX), which supply equipment for chip manufacturing, could benefit from China's push to develop domestic semiconductor capacity. Meanwhile, Chinese companies such as SMIC (Semiconductor Manufacturing International Corp) may see a surge in demand for locally produced chips as they circumvent U.S. restrictions.

While U.S. firms face headwinds, their expertise in advanced tech positions them to profit from China's long-term investments in semiconductor infrastructure.

Steel and Aluminum: Playing the Tariff Overlap

Despite the May truce, U.S. Section 232 tariffs on steel and aluminum remain at 25%, while China retaliates with similar measures. This creates a paradox: companies exposed to both markets may struggle, but those pivoting to untaxed regions—such as Southeast Asia or the EU—could thrive. Investors should consider firms like Nucor (NUE), which sources materials from tariff-free zones, or ArcelorMittal (MT), which has diversified production hubs.

Energy: A Shift Toward Diversification

China's persistent tariffs on U.S. LNG and coal have driven energy firms to seek new markets. However, the temporary tariff reduction may ease pressure on U.S. producers like Devon Energy (DVN) and Cheniere Energy (LNG). Simultaneously, Chinese buyers may cautiously return to U.S. energy exports if diplomatic relations stabilize.

The Diplomatic Wildcard: Timing the Truce

The truce's August expiration looms large. If extended, sectors like agriculture and energy could see sustained gains. If not, investors should prepare for renewed volatility. The upcoming Supreme Court ruling on U.S. tariff legality (expected by late 2025) adds another layer—invalidating the tariffs could force abrupt policy shifts, favoring companies in low-tariff industries.

Conclusion: Act Before the Clock Runs Out

The U.S.-China trade landscape is a high-stakes game of timing and sector-specific analysis. Investors who act swiftly to position themselves in agriculture, semiconductors, and energy—while hedging against diplomatic setbacks—can turn uncertainty into opportunity. The window to capitalize is narrowing: the August deadline and Supreme Court ruling are catalysts that could redefine market dynamics. For those ready to act, the rewards of navigating this volatility may prove substantial.

Investment decisions should consider individual risk tolerance and consult with a financial advisor. Data as of June 2025.