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In a big de-escalation of recent trade tensions, the US and China have recently agreed to a 90-day truce that significantly lowers tariffs on hundreds of billions of dollars in goods.
More specifically, the deal reduces US tariffs on Chinese imports from 145% to 30% and cuts Chinese tariffs on US goods from 125% to 10%. Importantly, the agreement provides a nice level of temporary relief while also opening the door for further negotiations.
Several companies with notable China exposure, Apple AAPL and Nike NKE, jumped on the news, providing much-needed relief following several months of uncertainty and an overall negative outlook.
Let’s take a closer look at each.
Apple Finds Big Relief
Down 15% year-to-date, Apple shares have struggled, underperforming relative to the S&P 500 in a big way and driven lower partly by initial tariff headlines. Shares faced pressure as a result, but have overall rebounded nicely from their 2025 lows over the past month, with the de-escalation mentioned above bringing positivity back in a strong way.
Image Source: Zacks Investment Research
Due to its heavy manufacturing exposure in China, the de-escalation of trade tensions is a massive positive for the company. The company previously warned that it may pass the higher costs onto consumers through iPhone price hikes, so the recent news is excellent for the company and the consumer.
It’s critical to remember that Apple has also been actively shifting its manufacturing operations to other countries (Vietnam, India) as part of a strategic effort to diversify its supply chain and mitigate the risks associated with geopolitical tensions and tariffs.
Nike Shares Bounce
Nike shares have similarly struggled in 2025, down more than 17% and widely underperforming relative to the S&P 500. Weak quarterly results, which have stemmed from weak demand for its offerings, has been a major thorn in the side, with the initial tariff announcements causing a meltdown in shares.
Similar to AAPL, shares have rebounded nicely off their 2025 lows, with the recent announcement providing significant relief.
Image Source: Zacks Investment Research
Most apparel names got hammered on the initial tariff announcements due to their heavy manufacturing exposure, with investors recalculating their profitability outlooks in a big way. EPS estimates for Nike fell considerably as a result, as shown below.
Image Source: Zacks Investment Research
While the current EPS outlook is undoubtedly one of negativity, we could see these expectations trickle back higher given the recent de-escalation. It’ll be interesting to see how the EPS outlook evolves for NKE and other apparel players, particularly if the updated tariff regime becomes even friendlier.