Asian Markets Mixed as Enthusiasm Over US-China Tariff Pause Tempers

Asian shares delivered mixed results on Tuesday as the initial optimism surrounding the 90-day trade truce between the United States and China gave way to renewed caution, the Associated Press reports.

While the agreement to temporarily reduce tariffs buoyed global markets at first, investors grew wary of lingering uncertainties and the potential for policy reversals.

The United States announced it will lower tariffs on Chinese imports to 30% from as high as 145%, while China will reduce duties on US goods to 10% from 125%. The reductions follow weekend talks in Geneva, which the US described as having yielded “substantial progress.” The moves provide a temporary reprieve and open the door for further negotiations.

“The outcome surpassed most expectations, reassuring investors,” said Stephen Innes, managing partner at SPI Asset Management. “Make no mistake, this was highly stage-managed diplomacy. But the optics are good and the implications real.”

However, analysts also noted that the underlying issues in US-China trade relations remain unresolved. Chinese President Xi Jinping, speaking to officials from China and Latin America, warned that “bullying or hegemonism only leads to self-isolation,” signaling Beijing’s ongoing frustration over trade tensions.

Asian markets reflected this mixed outlook. Japan’s Nikkei 225 rose 1.6% to 38,232.21, supported by gains in the auto sector. Toyota and Suzuki rose 3.7% and 4.3%, respectively, while Nissan added 3.4% amid restructuring news.

Elsewhere, South Korea’s Kospi was flat at 2,606.46, while Hong Kong’s Hang Seng dropped 1.5% to 23,189.15 as technology stocks sold off after a strong rally the previous day. China’s Shanghai Composite edged up 0.2%, Taiwan’s Taiex gained 1%, and Australia’s S&P/ASX 200 climbed 0.5%.

The market’s reaction underscores skepticism over the sustainability of the truce. Analysts warn that while the agreement brought short-term relief, the potential for policy shifts remains high, particularly given the unpredictable nature of US trade decisions.

Global markets had surged Monday in response to the agreement. The S&P 500 rose 3.3%, moving to within 5% of its all-time high, while the Dow Jones Industrial Average jumped 2.8% and the Nasdaq Composite surged 4.3%. Retailers and companies reliant on Chinese imports, such as Amazon, Best Buy, and Nike, posted significant gains.

In commodity markets, oil prices retreated following Monday’s rally. US crude fell 22 cents to $61.73 per barrel, and Brent crude dropped 25 cents to $64.72.

Meanwhile, the US dollar, which had strengthened broadly on Monday, eased slightly against the Japanese yen but firmed against the euro. Investors are now awaiting US economic reports later this week.