Trump Extends China Truce for 90 Days, Averting Tariff Hike | Daybreak Europe 8/12/2025

President Trump extended the tariff pause on Chinese goods for 90 days until November 10, averting a scheduled tariff hike and stabilizing trade ties between the world's two largest economies. Concurrently, China has urged local companies, particularly those involved in government-related projects, to avoid using Nvidia Corp.'s H20 processors.

Analysis

The market is processing two divergent geopolitical developments. On a macroeconomic level, the 90-day extension of the U.S.-China tariff truce until November 10 provides a short-term stabilization for global trade, averting an imminent tariff hike and contributing to a moderately positive market sentiment. This pause offers temporary relief for sectors sensitive to trade policy. However, this broad de-escalation is contrasted by a targeted, micro-level pressure point in the technology sector. Reports that China is urging local and government-related companies to avoid Nvidia Corp.'s (NVDA) H20 processors signal a persistent and focused effort to reduce reliance on U.S. technology. This development, reflected in the negative sentiment score of -0.5 for NVDA, underscores the ongoing risks within the tech supply chain and highlights that broader trade agreements do not preclude specific, company-level sanctions or competitive restrictions.

Key Decisions for Investors

• The 90-day tariff truce may provide a tactical window of stability for cyclical and trade-sensitive assets, but investors should mark November 10 as a key date for potential renewed volatility.
• Holders of Nvidia stock should re-evaluate the company's revenue projections from China, as the reported directive against its H20 processors presents a material headwind to its growth in a critical market.
• Portfolio managers should scrutinize other U.S. technology firms with significant China exposure, as the action against Nvidia demonstrates that targeted restrictions can occur independently of broader trade negotiations.