On October 30, 2025, the U.S. and China announced a temporary trade truce at the APEC summit, pausing new tariffs and committing to negotiations on intellectual property and market access, marking a de-escalation after years of escalating duties.

The U.S.-China trade war, starting in 2018, involves tariffs (taxes on imports) imposed by both sides to protect domestic industries, leading to higher costs for goods like electronics and soybeans. A truce is essentially a ceasefire allowing talks to resume without immediate economic penalties, aiming to balance fair trade while addressing issues like forced technology transfers.

This boosts investor confidence in Chinese stocks and global supply chains, potentially lifting the Shanghai Composite Index by 2-3% short-term; it eases pressure on U.S. companies like Apple reliant on Chinese manufacturing, reduces inflationary risks for global consumers, but challenges competitors in neutral markets like Vietnam by slowing diversification away from China, while giving Beijing more fiscal room for domestic stimulus.