WASHINGTON D.C. — In a decisive and controversial move, President Donald Trump announced Wednesday that the United States has finalized a long-anticipated trade agreement with China, one that dramatically raises tariffs on Chinese imports to 55%. The announcement, made during an afternoon press conference at the White House, marked a significant escalation in the administration’s confrontational economic stance toward Beijing and ignited immediate reactions from global markets, economists, and diplomatic observers.

Standing behind the presidential seal, Trump declared that the U.S. had secured a commitment from China to supply magnets and rare earth minerals—critical resources for American industries ranging from defense to electric vehicles. In exchange, the U.S. has agreed to restore access for Chinese students to attend American colleges and universities, a concession framed by the administration as “part of what was agreed to.” Trump characterized the deal as a necessary correction to decades of “bad trade policy,” adding that “China will now play fair.”

This announcement follows months of tariff escalations and trade friction. Trump’s earlier measures included new tariffs on imports from Canada and Mexico, actions he justified as part of his administration’s efforts to curtail illegal immigration and combat the fentanyl epidemic. The China deal echoes those motives, with the president specifically linking the increased tariffs to a broader crackdown on Chinese-origin synthetic opioids, particularly fentanyl. “We will not tolerate countries that look the other way while poison floods into our communities,” he said, tying economic policy directly to the nation’s ongoing opioid crisis.

Markets responded swiftly. The Dow Jones Industrial Average dropped 347 points following the announcement before partially recovering later in the day. Technology stocks saw sharp fluctuations amid concerns about continued disruption in global supply chains, particularly in sectors reliant on Chinese manufacturing. Conversely, shares in defense contractors and domestic mining firms climbed on expectations of increased demand for U.S.-based rare earth processing.

While Beijing has yet to issue a full official response, early reports from Chinese state media describe the deal as a “strategic compromise.” A brief statement from China’s Ministry of Commerce noted that the agreement was necessary to “preserve bilateral stability,” but hinted at possible retaliation should “unilateral pressure” continue. Analysts noted that the rare earths concession—long seen as a Chinese leverage point—was a surprising inclusion and may reflect economic pressures inside China’s own manufacturing base.

The political calculus behind the agreement is equally complex. With the 2026 election season already warming up, Trump’s move appears designed to reinforce his brand of “economic nationalism.” By tying trade to border security and the drug crisis, the administration is weaving a broader narrative that resonates with his core supporters. Critics, however, warn that such high tariffs may boomerang back on American consumers, driving up costs for everyday goods and further straining the post-pandemic economy.

Whether the deal will ultimately strengthen American industries or isolate them from essential trade partners remains to be seen. What is certain is that the Trump administration’s trade strategy continues to reject conventional diplomacy in favor of aggressive, transaction-based outcomes. As Trump concluded his press event, he framed the moment as a turning point: “This isn’t just a trade deal—it’s the end of an era of being taken advantage of.”

LVMH Moët Hennessy – Louis Vuitton has experienced a sharp 44% drop in share price from its all-time highs two years ago. After a period of extraordinary post-pandemic growth, many analysts are calling the decline a normalization rather than a structural downfall. While the luxury giant faced rough financials in the recent quarters, some believe this dip in LVMH’s stock price presents a unique opportunity for long-term investors.

Normalization After Pandemic Peaks

The remarkable stock surge of 46% annualized returns from March 2020 to April 2023 now appears unsustainable. The post-pandemic luxury boom, where LVMH thrived, saw the stock price spike, but it was not to last. As LVMH now faces a 44% drop, the company’s fundamentals are showing signs of stabilization, bringing the share price closer to a more sustainable level.

Despite the revenue downgrades and margin declines, the valuation of LVMH has become more attractive. Analysts suggest the market has overestimated the impact of temporary factors and that the stock is now undervalued relative to its historical P/E ratio, sitting at 19, below its 20-year average of 22.

Bumpy Financials But Room for Growth

LVMH’s Q1 2025 performance has been bumpy, with a notable double-digit decline in its Asia market, the company’s largest by revenue. However, Europe’s 2% growth offered some relief. The company’s most profitable segment, Fashion & Leather Goods, saw a 5% drop in sales during the first quarter, while Wines & Spirits were the most affected, though it only represents 6% of total sales.

Despite the challenges, LVMH’s operating margin remains well above pre-pandemic levels at 23%, signaling the company’s ongoing operational strength.

Valuation: Is It Time to Buy?

The current price-to-earnings ratio of 19 places LVMH at a discount compared to its luxury peers like Hermès, which trades at three times the valuation of LVMH. This lower valuation, combined with the company’s still-strong profitability, suggests that LVMH is undervalued relative to its competitors and historical performance.

In addition to its favorable earnings yield and cash flow yield, which imply steady growth expectations, analysts are revising their revenue growth and margin assumptions downward, presenting an opportunity for a positive surprise if expectations are met.

Global Factors: A Shift Toward European Luxury

The US-China trade tensions and global product boycotts may also shift spending toward European brands like LVMH, particularly as consumers move away from American products. This trend could potentially free up more disposable income for European luxury goods, further benefiting brands like Louis Vuitton and its parent company.

Conclusion: A Buy Opportunity?

While LVMH faces short-term hurdles, its long-term potential remains strong. The company’s reduced valuation, coupled with its dominant position in the luxury market, makes it an attractive investment for those looking to take advantage of short-term market corrections. If the company’s current financial difficulties normalize, LVMH is poised for modest growth, making it a solid international stock to consider.