Stocks Are Up, But Conditions Are Weaker

This past weekend brought unexpected developments in Geneva, as the U.S. unexpectedly backed down in its negotiations with China, agreeing to a significant reduction in tariffs and a temporary halt to the ongoing trade war. As a result, U.S. duties on Chinese goods were slashed from 145% to 30%, while Beijing lowered its own levy from 125% to 10%. The decision came on the heels of nearly six weeks of turbulent stock market activity and widespread backlash from business leaders across all industries. It also helped that the more sensible thinking of Bessent is starting to hold more sway in the White House than the more radical views of Navarro and Lutnick. Ultimately, the U.S. gained minimal concessions, while China secured a strategic advantage in shaping future trade agreements. The bold declarations of “Liberation Day,” once touted as a defining moment in American economic history, have now proven to be a disappointing misstep. Instead of achieving a triumphant victory, the U.S. ended up alienating allies, disrupting market stability, and adopting an approach that resembled schoolyard intimidation.