By: Gustian Farrow, Head of StoneX TV • Content Channels
Arlan Suderman, StoneX Chief Commodities Economist, shares his perspective on the implications of the 90-day truce between the US and China and its impact on trade, retailers, and global supply chains.
“The projected losses are a little bit smaller.” Suderman notes that even negative margins look less painful for corn and soybeans than for other crops. Better genetics let farmers “grow [their] way out of those losses with higher yields.”
The 90-day truce between the US and China has temporarily eased tariffs, offering a brief window for businesses to secure inventory and manage costs. Retailers are taking advantage of this pause to stock up for peak seasons despite remaining tariffs, leading to a surge in bookings from China to the US. “Retailers… want to take advantage of… the Christmas holiday shopping period. So this gives them the chance to stock up for that even though they will cost more because there are some tariffs in place”.
The rush to import goods has caused freight rates to climb sharply, with shortages of shipping capacity further complicating the situation. As Suderman notes, “freight rates increase about three and a half fold and they continue to increase as well. Many of the ships to carry the containers had been redirected to Europe. So there's a shortage of ships” [00:03:38]. The scramble reflects the uncertain outlook beyond the 90-day truce and the urgency to mitigate risks before tariffs potentially return.
Trade uncertainty and tariff threats are beginning to weigh on US consumers. Suderman points out, “consumer sentiment surveys… have dramatically increased consumer inflation expectations. That has consumers worried about keeping their jobs. How much things are going to cost in future” [00:04:38]. He warns that these fears can become self-fulfilling, especially in an economy reliant on consumer spending.
The current environment contrasts with previous rounds of US–China negotiations. Suderman observes that while negotiators on both sides have become more amenable, China’s leadership may be willing to wait out political changes in the US. “Xi… feels like if I can simply wait this thing out, President Trump will lose the power that he currently has to initiate the tariffs. And I may not have to give up anything” [00:07:21]. The result is an ongoing strategic standoff, with short-term relief but no immediate resolution in sight.
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---- Written by Gus Farrow
---- Expert: Arlan Suderman, StoneX Chief Commodities Economist
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