Nasdaq Composite inches higher as US, China trade tensions ease

The Nasdaq Composite is up 0.26% from Monday’s close, responding positively to what economic commentators have coined as a “breakthrough in US-China trade talks.” The bump was supposedly caused by news that the US government will grant Nvidia licenses to resume exports of its advanced H20 artificial intelligence chips to China.

The decision reverses a ban imposed in April by President Donald Trump’s administration. According to a Monday blog post from Nvidia, the US government had officially greenlighted the exports to the world’s second-largest economy.

“Nasdaq is reacting to what can only be considered a major breakthrough in trade with China. Nvidia’s chips will be like the US dollar, it is the reserve currency of technology, and it is the US’s as it should be. Congratulations, Jensen, for amazing perseverance. No quit in this guy!” CNBC’s Mad Money host Jim Cramer wrote in a Tuesday X post.

Good, the Nasdaq is reacting to what can only be considered a major breakthrough in trade with China. Nvidia's chips will be like the US dollar, it is the reserve currency of technology and it is the U.S.'s as it should be. Congratulations Jensen for amazing perseverance. No quit…

— Jim Cramer (@jimcramer) July 15, 2025

Just last month, the US and China reached a temporary truce in their trade war, agreeing to a deadline of August 12 to finalize a longer-term deal on high tariffs.

Huang says Nvidia has received the go-ahead to sell H20 chips in China

The US Department of Commerce has yet to release an official comment. Still, CEO Jensen Huang, speaking during a podcast yesterday with the Special Competitive Studies Project, confirmed he received the “thumbs up” from Washington. 

“The American tech stack should be the global standard, just as the American dollar is the standard by which every country builds on,” Huang remarked. He reiterated that while China is a competitor and adversary to America, the Asian nation should not be seen as an enemy.

Huang has been advocating for the US to open the locked channel of Nvidia chips to China, arguing that cutting off the market would undermine US companies and boost competitors like Huawei. 

His lobbying efforts appear to have swayed the biggest voices of the Trump administration, including David Sacks, the White House’s AI and crypto czar.”

Nvidia created the H20 chip in compliance with US export restrictions implemented under President Joe Biden’s administration in 2023. It is less powerful than Nvidia’s flagship H100 chips, but has memory capabilities pertinent to the AI inference processes.

US-China trade numbers tank in tariff era

The US-China trade relationship is seemingly improving, but most parts of what both governments want changed are still unresolved. The overall volume of trade has dropped, but the US merchandise trade deficit is ballooning. 

In May, China’s share of total US trade fell to just 5.89%, the lowest monthly figure in over two decades. 

President Trump is headstrong in trying to shrink the US trade deficit, but it has grown in six of the past eight years, topping $1 trillion annually in recent years. Yet, for the first time in decades, the US trade deficit with Mexico and Canada combined surpasses that with China.

The Asian country ranks as the United States’ third-largest trade partner, trailing Mexico, which accounts for 16.22% of US trade, and Canada at 12.53%. The gap has grown so wide that China’s trade share is now closer to the combined percentage of all other countries outside the top two than it is to either Mexico or Canada individually.

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