May 12 was a flash point in the ongoing tariff troubles between the U.S. and China. Both sides agreed to a 90-day moratorium on retaliatory tariff hikes, trimming hefty tariffs for the three-month trade truce.
The deal’s centerpiece is a decline in reciprocal tariffs from 125% to 10% for the entire 90-day period. One big exception is that the U.S. will keep the 20% broad import tariff that the Trump administration has linked to curbing the illegal fentanyl trade. So the reduction on imports from China equates to a drop from 145% to 30%.
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Analysts are generally bullish on the tariff pullback. “Today’s announcement even exceeds our constructive expectations,” Deutsche Bank commented in a new research note. “In our view, this announcement is not only better than we expected but also better than the market would have expected back in March.”
President Donald Trump called the moratorium a “total reset,” which is just as good a term as any to define the common ground needed by both countries to dial the trade war down several notches and possibly set the terms for a permanent deal.
Make no mistake: The 90-day deal is also a welcome sign for U.S. sectors being squeezed by both sides on foreign trade, even if the endgame isn’t concluded.
“The 90-day tariff pause gives retailers, tech firms and manufacturers some short-term breathing room, but this is a reprieve, not a reset,” says Liz Hempel, a partner at McKinsey & Co. in New York. “For consumer brands and tech companies that rely heavily on Chinese goods, the rollback eases cost pressures and stabilizes pricing in the near term.”
Industrial players see some relief, too, particularly those dependent on Chinese parts. “Those companies are using this 90-day window to double down on supply chain agility, scenario planning and AI-driven decision making, which is a business imperative given the continued impact of disruptions across today’s global economy,” Hempel notes.
Which sectors may benefit most from the tariff moratorium and thus gain the attention of investors looking to get an early foothold in the trade recovery saga? These segments of the stock market are primed for a big bounce-back if the 90-day window expands into a longer-term timetable:
— Retail and consumer goods stocks.
— Technology and semiconductor stocks.
— China stocks.
— Industrial stocks.
— Auto stocks.
— Agricultural and farming stocks.
Retail and Consumer Goods Stocks
Retailers and consumer brands are experiencing a surge “due to reduced tariffs on Chinese imports, alleviating cost pressures and boosting investor confidence,” Hempel says. She cites companies such as Nike Inc. (ticker: NKE), Under Armour Inc. (UAA), Lululemon Althletica Inc. (LULU) and Abercrombie & Fitch Co. (ANF), which have already seen their share prices rise as of the moratorium.
Likewise, retailers like Amazon.com Inc. (AMZN), Best Buy Co. Inc. (BBY) and Target Corp. (TGT) are ideally positioned for a tariff truce right now, Hempel notes. “Each has benefited from eased concerns about higher production costs, leading to stock gains.”
Technology and Semiconductor Stocks
The technology sector should shine if China and the U.S. start singing from the same trade policy hymnal. “Tech companies, particularly those reliant on Chinese manufacturing and markets, are seeing positive impacts from the tariff reductions,” Hempel says. “On the technology side, Amazon experienced a 7.4% surge, outperforming other major tech stocks, due to its reliance on Chinese goods and advertisers.”
On the semiconductor stock front, companies like Nvidia Corp. (NVDA), Intel Corp. (INTC) and Marvell Technology Inc. (MRVL) saw significant gains, with the iShares Semiconductor ETF (SOXX) increasing by 6.7%, Hempel says.
Investors shouldn’t wait too long, as the leading Magnificent Seven tech stocks had already added $837.5 billion in market value the day the deal was announced. Material costs and supply chain pressures will likely abate during the 90-day period, which should boost sector stocks.
China Stocks
Investors shouldn’t overlook China stocks in the tariff deal, as publicly traded companies like e-commerce giants Alibaba Group Holding Ltd. (BABA) and JD.com Inc. (JD) are up 7.5% and 10.1% over the past five days of trading, respectively, as of May 13. Meanwhile, the electric vehicle manufacturer XPeng Inc. (XPEV) rose 8.3% over the same period.
Analysts are recalibrating their China economy calls, with UBS upping its GDP outlook range for 2025 from 3.4% to between 3.7% and 4%. Fidelity International cited two China stock industries of interest after the tariff deal in another research note: “Machinery shares outshone on a resurgence of the humanoid-robot trade, led by Guangdong Topstar Technology Co. Ltd. (300607.SZ). Apple Inc. (AAPL) supply chain names rallied after local distributors flagged iPhone price cuts ahead of the June 18 shopping festival.”
Industrial Stocks
After the U.S.-China tariff reduction deal, the manufacturing and heavy equipment sectors are worth a closer look.
“Caterpillar Inc. (CAT) is a bellwether with strong ties to Chinese infrastructure and heavy equipment markets,” says Victoria Bogner, a certified financial planner and head of wealth planning at Allworth Financial, in Lawrence, Kansas. “It tends to respond quickly to trade optimism.”
On the industrial side, Caterpillar and Boeing Co. (BA) both have exposure to global demand that could expand after the tariff truce, said Greg Drozdow, founder of Drozdow Financial in Miami. “Stanley Black & Decker Inc. (SWK) is also a compelling pick,” Drozdow says. “The company has previously faced struggles due to tariffs impacting its tool and hardware products. With the recent tariff reductions, Stanley Black & Decker is another company that could now benefit from decreased production costs and enhanced competition in global markets.”
In the raw materials sector, lithium and zinc saw positive sentiment after the deal went public. Lithium, in particular, looks promising. The main Guangzhou Futures Exchange lithium carbonate futures contract rose from 62,560 yuan to 64,040 yuan (about $8,890) per metric ton on May 12, signaling professional investors are boosting their lithium export outlook, at least for the next three months.
Zinc, which is heavily used in auto manufacturing, also rose higher on the heels of the tariff deal. On May 12, the London Metal Exchange three-month zinc contract climbed by 1.8%, as the outlook for global supply chain challenges improved.
Auto Stocks
The global auto industry should also benefit from the 90-day trade deal, as manufacturing and transport costs are expected to decline. Big investors immediately saw the connection, driving up bellwether industry stocks on the news. Tesla Inc. (TSLA) saw its shares soar 12% between the May 12 open and May 13. U.S. automakers like Ford Motor Co. (F) and General Motors Co. (GM), the two largest in-country car manufacturers, saw their share prices rise by 3.3% and 11%, respectively, in the two days following the tariff deal’s announcement.
Still, investors must be selective with auto-related stocks. Import tariffs of 25% on vehicles and certain auto parts remain in place as exceptions to the temporary deal. Look to American-made parts and vehicles, as multiple auto sector manufacturers have pivoted to U.S.-based production until a final tariff deal with China is negotiated.
Agricultural and Farming Stocks
Agricultural companies can breathe at least a temporary sigh of relief, as the tariff deal should make it easier to sell and transport produce between China and the U.S. The tariff truce is good news for U.S.-based farmers, too, as exports make up 20% of U.S. farm income, according to the American Farm Bureau Federation. China is the largest international market for key agricultural commodities like soybeans, meat and cotton, so trade stability between the two nations would be a boon to farmers.
Drozdow says he’s keeping an eye on Deere & Co. (DE) and Archer-Daniels-Midland Co. (ADM) “as trade flows start to normalize.” Deere, which relies heavily on raw material imports and views China as a lucrative sales market, saw its share price rise by 5.5% this week. ADM is another highflier right now. Its share price is up 5.9% this week and up 9.9% over the past 30 days, a reversal of fortune after multiple analyst downgrades earlier in 2025 due to sales, tariff and supply chain issues. If the U.S.-China tariff truce becomes a tariff turnaround, the investing case for ADM and other agricultural stocks could change in a hurry.
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U.S.-China Trade Deal: Which Stocks Will Benefit From the Tariff Truce? originally appeared on usnews.com
