US–China Trade Thaw Sparks Relief, But Uncertainty Lingers

Market sentiments improved following the 90-day suspension of US–China tariffs on 12 May, a move viewed as more aggressive than expected. Risk assets—including major commodities—saw modest gains, reflecting cautious optimism. Iron ore (62% Fe fines, CFR China) rose 2.2%, from $97.93 on 9 May to $100.49 by 12 May, settling at $100.10 on 13 May after the pause announcement in Geneva.

Capesize freight derivatives also saw a surge in interest leading up to the announcement in Geneva, with Baltic Exchange Capesize FFA volumes peaking at 8,905 lots on 8 May, before tapering to 2,925 lots by 12 May. Spot C5TC rates slid slightly from $14,532/day to $14,354/day over the same period, reflecting a wait-and-see approach by market participants.

Despite ongoing uncertainties, the tariff pause offers a short-term window of opportunity. Exporters may frontload shipments to the US, as seen in Q1 2025, potentially inflating the trade deficit and impacting freight demand dynamics. All eyes now turn to Trump’s Gulf tour, aimed at strengthening US economic ties in the Middle East—a move that could introduce new variables into global trade flows.

In a market buffeted by both headwinds and tailwinds, this 90-day thaw is as much a relief as it is a reminder of the volatility still in play.

For further insights, contact your BRS broker or reach us at research@brsbrokers.com.