Strategic Opportunities in a Fractured Trade Landscape: Navigating the U.S.-China Truce for Supply Chain Winners

The U.S.-China trade truce, now in its final weeks, has created a fragile window of opportunity for companies to reconfigure supply chains and capitalize on reduced tariffs. While the 90-day agreement lowered reciprocal tariffs to 10%—temporarily easing the 30% effective rate (including the 20% fentanyl tariff)—the complex web of overlapping duties and geopolitical risks demands a nuanced investment approach. This article examines how industrials, semiconductors, and logistics firms are positioned to thrive in this fractured environment, while cautioning against sectors still exposed to lingering tariffs.

The Tariff Landscape: A Mixed Bag of Opportunities and Risks

The May 2025 Geneva deal reduced U.S. reciprocal tariffs on Chinese goods from 125% to 10%, but this reprieve is stacked with the 20% fentanyl tariff and other levies like Section 232 tariffs (50% on steel/aluminum derivatives). The net result is an effective tariff rate of 30% on most goods until August 12, 2025, after which tariffs could revert. Meanwhile, China's retaliatory tariffs on U.S. goods average 32.6%, with agricultural and industrial goods bearing the brunt.

The truce's brevity and the layered tariff structure create both openings and pitfalls. Companies with agile supply chains—able to pivot production or source materials from tariff-free zones—are poised to capture cost savings, while those reliant on tariff-hit sectors (e.g., steel appliances) face headwinds.

Industrials: Navigating Steel and Aluminum Tariffs

The U.S. Section 232 tariffs impose a 50% levy on household appliances containing steel or aluminum, effective June 23, 2025. This targets items like refrigerators and washing machines, which now face a combined tariff rate of up to 80% when stacked with the fentanyl and Section 301 duties.

Investment Play: Firms that can reorient production to tariff-free regions or adopt materials outside the scope of Section 232 will gain an edge. For example, Whirlpool (WHR), which sources parts from Mexico and Thailand, may benefit from reduced reliance on Chinese steel. Conversely, companies overexposed to U.S. imports of steel-dependent goods—like appliance manufacturers without regional supply flexibility—are vulnerable.

Semiconductors: A Sector of Strategic Exemptions

The U.S. exempted semiconductors and electronics from reciprocal tariffs retroactively to April 5, 2025, reducing their effective tariff burden to 20% (the fentanyl rate). This aligns with U.S. efforts to secure semiconductor supply chains amid China's dominance in chip manufacturing.

However, the four-year Section 301 review introduced a 50% tariff on Chinese-made semiconductors used in critical sectors like EVs and solar cells. This has spurred investment in U.S. and Taiwanese foundries.

Investment Play: Companies like Intel (INTC) and Taiwan Semiconductor Manufacturing (TSM) are beneficiaries of U.S. incentives for domestic production. Their stock performance since 2024 highlights this trend:

Logistics: The Agile Supply Chain Managers

The fragmented tariff landscape rewards logistics firms with global networks and real-time supply chain visibility. Companies like C.H. Robinson (CHRW) and FedEx (FDX) can pivot shipments to avoid high-tariff routes, while also benefiting from increased demand for regionalized supply chains.

Risks and Caution Flags

• Truce Expiration: If no extension is agreed by August 12, tariffs could revert to higher rates, negating recent gains.
• Sector-Specific Tariffs: Steel/aluminum derivatives and EV components remain vulnerable to elevated duties.
• Geopolitical Volatility: Escalation over issues like rare earths or fentanyl could reignite trade tensions.

Conclusion: A Temporary Window for the Agile

The U.S.-China truce offers a fleeting opportunity for firms with diversified supply chains to cut costs and gain market share. Investors should prioritize companies in industrials (with regional production flexibility), semiconductors (exempted from reciprocal tariffs), and logistics (with global route optimization). However, portfolios should remain diversified to hedge against post-truce uncertainty and sector-specific risks.

The winners will be those who treat this truce not as a permanent solution but as a catalyst to build resilience against the next phase of trade uncertainty.