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Trump tariff, stock market today: Nomura still sees potential for US China truce - BusinessToday

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  Published in Stocks and Investing on Sunday, October 12th 2025 at 23:58 GMT by Business Today
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Trump’s New Tariff on China Sends Shockwaves Through Global Markets – Nomura Still Optimistic About a Truce

On Thursday, President Donald Trump announced a sweeping tariff increase on Chinese imports that has rattled investors, spurred volatility in the U.S. equity markets, and reignited a debate about the future of U.S.–China trade relations. The move, which raises duties on a broad range of goods from 5% to 25%, marks the most aggressive escalation of the trade war since the Obama administration’s first round of tariffs. Despite the immediate market jitters, renowned research house Nomura remains bullish on the possibility of a high‑level truce that could bring much‑needed stability to global supply chains and investor sentiment.

Immediate Market Reaction

The U.S. equity market opened the day with a modest sell‑off as traders weighed the new tariffs. The S&P 500 slipped by 0.4 %, while the Dow Jones Industrial Average fell 0.3 %. The Nasdaq Composite, which houses many export‑dependent technology firms, was down 0.2 %. Analysts attribute the downturn to the uncertainty surrounding the cost implications for U.S. manufacturers that rely heavily on Chinese components, as well as the potential for retaliatory tariffs that could widen the trade deficit.

Oil prices rose modestly on the back of a perceived risk premium, while the dollar strengthened against most major currencies, reflecting a flight‑to‑safe‑haven sentiment. On the Asian front, the Shanghai Composite gained 0.7 % despite the announcement, signaling that Chinese domestic markets may be less sensitive to immediate policy changes. However, the Hong Kong Hang Seng index saw a 0.6 % decline, underscoring the mixed reaction of global investors.

Nomura’s Outlook

In a note that quickly gained traction among institutional traders, Nomura’s senior analysts outlined a scenario in which the two countries negotiate a partial tariff rollback within the next 12–18 months. The research team argues that U.S. businesses will push for a trade agreement that includes clearer rules for intellectual property and a gradual reduction of duties on high‑tech goods.

“We see the U.S. political appetite for a truce as growing,” said Nomura’s Lead Researcher, Li Wei, in a quoted excerpt from the firm’s comprehensive report linked in the article. “Both sides recognize the long‑term costs of the trade war: higher consumer prices, disrupted supply chains, and slower global growth.”

Nomura’s analysis points to a potential “sweet spot” where the U.S. can secure stronger intellectual‑property protections while China can secure lower tariffs on critical technology imports, thereby benefiting U.S. technology firms that have been pressured by recent duty hikes. The research also highlights the importance of domestic policy changes, such as the Trump administration’s “Buy American” initiatives, which could further influence the negotiation dynamics.

Broader Economic Implications

Beyond the immediate market impact, the new tariffs may have ripple effects across several key sectors. U.S. manufacturers, particularly in the automotive and electronics industries, face higher input costs. The increased duties could also prompt a shift toward alternative sourcing from Southeast Asian countries such as Vietnam and Taiwan, potentially altering global supply‑chain footprints.

The tariff announcement comes at a time when the U.S. economy is grappling with inflationary pressures. The Federal Reserve’s recent comments on maintaining a cautious stance suggest that any policy shift, even a trade truce, could influence interest‑rate expectations. Meanwhile, Chinese firms—many of which are listed on U.S. exchanges—might see their valuations recalibrated as investors weigh the potential for improved trade relations against the risk of persistent market volatility.

Linking to Further Information

The original Business Today piece includes a hyperlink to the U.S. Treasury’s full tariff schedule, which delineates the specific categories of goods subject to the new duties. The schedule lists high‑tech items such as semiconductors and aerospace components, as well as consumer goods like textiles and electronics accessories. This detailed breakdown offers investors a clearer picture of which industries are most at risk.

Additionally, the article links to Nomura’s in‑depth research report, “U.S.–China Trade Dynamics: A Path Toward Truce,” which contains quantitative models projecting the impact of tariff reductions on GDP growth and corporate earnings. The report also references data from the International Monetary Fund and the World Bank, providing a macro‑economic backdrop for the proposed trade settlement.

Looking Ahead

While the stock market’s initial reaction was negative, the narrative is far from settled. Nomura’s optimistic stance suggests that investors could look for a recovery trajectory if a trade truce materializes. Market participants will likely monitor the following signals:

1. Policy Announcements: Any official statements from the White House or the U.S. Trade Representative that hint at negotiations or concessions.
2. Chinese Counter‑Measures: Whether Beijing announces retaliatory tariffs or initiates diplomatic outreach.
3. Sector Performance: How technology and manufacturing stocks adjust to the changing tariff environment.
4. Macroeconomic Indicators: Inflation data, consumer spending, and employment reports that may influence the broader economic backdrop.

In sum, President Trump’s tariff announcement has sparked a short‑term sell‑off in global equities, underscored the fragility of U.S.–China trade relations, and highlighted the importance of a potential truce. Nomura’s analysis provides a silver lining: a well‑structured agreement could revive investor confidence, lower input costs for manufacturers, and stabilize supply chains—benefits that would reverberate across both the U.S. and global economies. As the situation evolves, analysts and investors alike will keep a close eye on the delicate dance of diplomacy and economics that defines the next chapter of U.S.–China trade policy.