The recent agreement between the United States and China to temporarily halt their trade war for a 90-day cooling-off period has sparked a significant surge in global stock markets.

The truce, negotiated by the Trump administration, represents a reprieve from rising tariffs that had threatened to further strain economic relations between the two major economies, and under the agreement, U.S. tariffs on Chinese imports have been reduced from 145% to 30%, while China's retaliatory tariffs on U.S. goods have been lowered from 125% to 10%, as Fox News reports.

The announcement of the trade truce has been welcomed by global markets, providing immediate relief after months of volatility triggered by escalating tariffs.

Prior to the truce, President Donald Trump had imposed high tariffs that impacted financial markets negatively, sparking fears of a looming recession.

U.K. deal adds to successes

Amid these developments, Trump has also touted a recent trade deal with the United Kingdom. This new agreement is described by Trump as "the first of many" since the initiation of his aggressive tariff policies.

Ryan Williams, speaking on Fox News, remarked that "it is a positive first step" in the president's efforts to initiate further trade agreements.

The trade deal and tariff reductions come at a time of political significance for Trump. With midterm elections looming on the horizon, the president is highly focused on achieving political and economic victories that could bolster his standing among voters.

A recent Fox News national poll highlights the challenges he faces, showing a 44% approval rating amid heightened concerns over economic performance and inflation.

Treasury Secretary Scott Bessent offered insight into the administration's perspective on the truce with China, stating, "We both have an interest in balanced trade, and the U.S. will continue moving towards that." These sentiments reflect an ambition to not only navigate immediate trade tensions but also forge sustainable economic partnerships moving forward.

Striking the right balance

President Trump has remained optimistic about the potential for future deals. He has stated that "countries are calling us up" eager for negotiation and resolution, expressing a belief that other nations are "dying to make a deal."

However, despite these negotiations and presidential optimism, domestic approval of Trump's economic policies remains challenged. The Fox News poll indicated public disapproval over Trump’s handling of the economy, with only 38% expressing a favorable view. This concern extends to his approach to inflation and tariffs as well, with a 33% approval rating.

The tariff adjustments mark a significant shift from earlier in the year, when high tariffs imposed by the Trump administration resulted in a dramatic market sell-off.

This volatility not only heightened fears of a potential economic downturn but also piled pressure on the administration to recalibrate its trade strategies.

Political implications assessed

Williams has emphasized that President Trump's broader agenda requires time and strategic deal-making, which the current 90-day cooling-off period aims to facilitate. "He’ll be given a period of time to execute deals to prove that his plans are working," Williams stated. This period may be viewed as critical for solidifying more comprehensive trade agreements.

In light of these events, Trump might capitalize on the truce to generate political momentum. However, Williams noted that Trump "will have to back it up with more" successful agreements to see long-term benefits, underlining that the trade deal with the UK is a sign of progress but not an end in itself.

The political dimension of the trade actions is particularly poignant given Trump's current standing. The need for economic successes has become intertwined with his broader legislative agenda as he attempts to navigate congressional hurdles.

Further developments awaited

As developments continue to unfold, observers will be watching closely to see if the trade truce will have a lasting impact, both economically and politically.

The actions taken in the coming months will likely influence not only stock markets but also the president's approval ratings as the midterm elections approach.