US
US and China agree to slash tariffs on each other
The US and China, the world’s largest and second-largest economies, have agreed to slash tariffs on each other as they seek to end their trade war.
Speaking after talks with Chinese officials in Geneva, US treasury secretary Scott Bessent told reporters the two sides had reached a deal for a 90-day pause on measures.
US trade representative Jamieson Greer said so-called reciprocal tariffs were now at 10% each.
In real terms, it meant the US is reducing its 145% tariff to 30% on Chinese goods, as a tariff of around 20% had been in effect from previous administrations.
China has agreed to reduce its 125% retaliatory tariffs to 10% on US goods.
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Tariffs, taxes on imports of more than 100%, had been imposed on both sides. China was the only country exempt from a 90 pause on the “retaliatory” tariffs above the base 10% levies applied by America.
Major retailers had been warning President Donald Trump of empty shelves as US importers pause shipments.
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Mr Bessent said after a weekend of negotiations in Switzerland, the countries had a mechanism for continued talks.
It’s the second major trade announcement made by the US in the last week, after a deal was secured with the UK on Thursday.
The move signals a willingness from the Americans to make deals on tariffs.
Welcomed news
The news was received positively by Asian stock markets on Monday as major indexes were up.
In China, the Shanghai Composite stock index rose 0.8%, the Shenzhen Component gained 1.7%, and Hong Kong’s Hang Seng index was up nearly 3%.
In countries across Asia, benchmark stock indexes also rose. Korea’s Kospi grew 1.1%, Japan’s Nikkei was up 0.8% while India’s Nifty 50 index of most valuable companies gained more than 3%.
US stocks look poised to rise on the open, based on after-hours trading. Wall Street’s tech-heavy Nasdaq is expected to rise by 3.3%, and the S&P 500 index of companies relied on to be stable and profitable by 2.5%.
What next?
As with the other counties subject to 90-day pauses, a permanent deal will need to be reached, but confidence across the world is likely to have been boosted.
Businesses now need a clear timetable and roadmap for future negotiations under the newly announced economic and trade consultation mechanism, said Andrew Wilson, the deputy secretary general of the International Chamber of Commerce.
“The credibility of that process for resolving underlying frictions in the Sino-US economic relationship will be mission-critical in terms of restoring business confidence.”