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Tariff Truce Triggers Tech Triumph: Navigating Trade Relief and Fed Rate Cuts

Philip CarterTuesday, May 13, 2025 10:59 pm ET

33min read

The U.S.-China tariff truce, effective May 14, 2025, has breathed new life into sectors long stifled by trade wars. For investors, this 90-day ceasefire is more than a temporary reprieve—it’s a catalyst to reposition portfolios toward tech and global supply chain beneficiaries. With tariffs on Chinese imports slashed and retaliatory measures paused, industries like semiconductors, crypto infrastructure, and e-commerce now stand at the precipice of growth. Yet, the path forward is fraught with geopolitical uncertainty and inflationary risks. Here’s how to navigate it.

The Tech Sector: A Golden Crossroad of Demand and Policy

The truce’s most immediate beneficiary is the tech sector, where reduced tariffs on semiconductors, AI hardware, and cloud infrastructure are unlocking pent-up demand. Take Nvidia (NVDA), whose AI chips power everything from self-driving cars to generative AI models. With China’s tariffs on semiconductors dropping from 125% to 10%, the company can now supply its A100 and H100 chips to Asia’s booming AI market at far lower costs. This isn’t just about cost savings: it’s about capturing a $50 billion AI hardware market in China alone by 2027.

The stock has already surged 22% since April, reflecting market optimism. But the truce also opens a strategic door for broader tech adoption. Cloud providers like Amazon Web Services and Microsoft Azure, which rely on Chinese-manufactured servers, can now scale operations without the drag of punitive tariffs. Meanwhile, the Fed’s cautious stance on rate cuts—driven by easing inflationary pressures—adds fuel to tech’s momentum.

Crypto’s Institutional Sunrise: Coinbase and Cross-Border Liquidity

The tariff truce isn’t just about hardware; it’s about software and financial systems. For Coinbase (COIN), the world’s largest crypto exchange, reduced trade barriers could accelerate institutional adoption of blockchain. China’s suspension of retaliatory tariffs on digital infrastructure opens pathways for cross-border crypto transactions, potentially attracting institutional investors seeking exposure to China’s $1.4 trillion crypto market.

Coinbase’s 40% rally in 2025 already hints at this shift. The truce’s de minimis tariff cuts also benefit e-commerce platforms like Shein and Temu, which rely on low-cost, small parcel imports—many of which now carry crypto-linked payment systems. As crypto institutionalization converges with tariff relief, Coinbase stands to profit from both transaction volume and regulatory clarity.

Risks: Inflation, Geopolitics, and the 90-Day Clock

The truce’s fragility cannot be ignored. While April’s CPI reading marked the slowest price growth since 2021, the Fed’s “tariff shock” remains untested. A sudden spike in ocean freight costs (as seen in Q1’s 3.6% sales decline in the promotional goods sector) could reignite inflation. Geopolitical risks loom too: the truce’s non-binding nature means negotiations over intellectual property and state subsidies could reignite tariffs after 90 days.

Meanwhile, the EU’s threat of retaliatory tariffs on U.S. goods adds another layer of uncertainty. Investors must remain agile, ready to pivot if trade tensions resurface.

Strategic Allocations: Tech and Trade Winners, Now

The path forward is clear: tilt portfolios toward semiconductors, AI infrastructure, and digital finance.

Buy Tech Leaders: Nvidia and AMD (AMD) dominate AI chip markets, while cloud stocks like AWS and Microsoft (MSFT) benefit from smoother supply chains.
Position for Crypto: Coinbase and blockchain infrastructure stocks (e.g., Marathon Digital Holdings) will thrive as institutional adoption accelerates.
Monitor Fed Signals: If the Fed pauses rates or hints at cuts—a distinct possibility if inflation trends hold—tech multiples could expand further.

The tariff truce is a fleeting window—but one that offers outsized rewards for the bold. Act now, before the clock runs out.

The truce’s expiration in August looms, but the strategic case for tech and crypto is too compelling to ignore. For investors, this is the moment to seize growth before the next storm.

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