Navigating the Tariff Truce: Sector-Specific Plays in the 90-Day Window

The U.S.-China tariff truce, announced in May 2025, has injected a rare dose of optimism into global markets. While the 90-day suspension of escalating tariffs is a temporary reprieve, it creates a critical window for investors to capitalize on sector-specific opportunities in logistics, technology, and manufacturing. However, the deal’s fragility—hanging on unresolved structural issues like trade deficits and market access—means risks remain. Here’s how to position your portfolio for the short-term upside while hedging against post-truce uncertainty.

The Immediate Opportunity: Supply Chains Breathe Easier
The truce’s most immediate impact is the rollback of tariffs by 115 percentage points on both sides. For logistics firms, this translates to lower costs for transporting goods across the Pacific. Companies like Maersk (MAERSK-B.CO), which relies heavily on Asia-U.S. trade routes, and UPS (UPS), a major player in cross-border e-commerce, stand to benefit from reduced pricing pressures and smoother supply chains.

The suspension of China’s rare earth export controls further fuels opportunities. Rare earth minerals, critical for semiconductors and renewable energy technologies, have long been a geopolitical lever for Beijing. Their liberalization removes a chokepoint for industries like semiconductors, where companies such as Texas Instruments (TXN) or Applied Materials (AMAT) could scale production without supply bottlenecks.

Tech Sector: A Race to Scale Before the Clock Ticks Down
The tech sector is the clearest beneficiary of the truce. With China lifting restrictions on rare earths—a key input for chips, magnets, and EV batteries—U.S. firms can now secure materials at pre-tariff prices. This creates a 90-day window to ramp up production, invest in R&D, or expand market share in China. For instance, Nvidia (NVDA), facing shortages of Chinese-made components for AI chips, could accelerate supply chain diversification.

But the clock is ticking. Investors should prioritize companies with scalable operations in China-facing industries, such as semiconductor manufacturers with joint ventures in mainland China or EV battery producers with local partnerships.

Manufacturing: Cost Savings and Market Access Reopen
Manufacturers, particularly those in sectors like machinery and automotive, gain immediate relief. The U.S. tariffs on Chinese goods had previously inflated costs for U.S. firms sourcing parts from China. Now, companies like Caterpillar (CAT), which relies on Chinese steel and components, see margin improvements. Meanwhile, the suspension of China’s “unreliable entity list” removes barriers for U.S. firms seeking to operate in China’s massive market.

The truce also eases pressure on exporters. U.S. agricultural giants like Archer-Daniels-Midland (ADM) or Cargill (CARG) can now sell to China at pre-tariff rates, boosting profitability.

The Catch: Risks Linger Beyond 90 Days
While the truce offers a breather, the deal’s foundations are shaky. Structural issues—China’s $96 billion trade surplus, U.S. market access demands, and the unresolved fentanyl tariff—remain unresolved. A failure to address these could trigger a tariff resurgence, punishing sectors that expanded during the truce.

Investors must hedge against this risk. Consider:
1. Inverse ETFs: Products like PRO shares Short China ETF (YXI) can offset losses if tariffs spike again.
2. Options: Put options on tariff-sensitive stocks (e.g., TXN, CAT) to protect gains.
3. Diversification: Shift capital toward sectors less reliant on U.S.-China trade, such as cloud computing or healthcare.

Final Call: Act Fast, but Stay Prudent
The 90-day truce is a tactical advantage, not a lasting solution. Investors should prioritize companies with immediate execution capacity in logistics, tech, and manufacturing while layering hedges. The window to capitalize on cost savings and market access is narrow—but the rewards for agility could be substantial.

The message is clear: Deploy capital now, but keep one eye on the clock. When the truce expires, so does the illusion of stability.

This article provides actionable insights but is not financial advice. Investors should conduct due diligence and consult professionals before making decisions.