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.”
At least 51 people have died after heavy rain caused flash flooding, with water bursting from the banks of the Guadalupe River in Texas.
The overflowing water began sweeping into Kerr County and other areas around 4am local time on Friday, killing at least 43 people in the county.
This includes at least 15 children and 28 adults, with five children and 12 adults pending identification, Kerr County Sheriff Larry Leitha said at a news conference.
In nearby Kendall County, one person has died. At least four people were killed in Travis County, while at least two people died in Burnet County. Another person has died in the city of San Angelo in Tom Green County.
People comfort each other in Kerrville, Texas. Pic: Jason Fochtman/Houston Chronicle via AP
Large piles of debris in Kerrville, Texas, following the flooding. Pic: Reuters//Marco Bello
An unknown number of people remain missing, including 27 girls from Camp Mystic in Kerr County, a Christian summer camp along the Guadalupe River.
Rescuers have already saved hundreds of people and would work around the clock to find those still unaccounted for, Texas governor Greg Abbott said.
But as rescue teams are searching for the missing, Texas officials are facing scrutiny over their preparations and why residents and summer camps for children that are dotted along the river were not alerted sooner or told to evacuate.
AccuWeather said the private forecasting company and the National Weather Service (NWS) sent warnings about potential flash flooding hours before the devastation, urging people to move to higher ground and evacuate flood-prone areas.
Debris on the banks of the Guadalupe River in Hunt. Pic: AP Photo/Julio Cortez
An overturned vehicle is caught in debris along the Guadalupe River. Pic: AP
The NWS later issued flash flood emergencies – a rare alert notifying of imminent danger.
“These warnings should have provided officials with ample time to evacuate camps such as Camp Mystic and get people to safety,” AccuWeather said in a statement that called Texas Hill County one of the most flash-flood-prone areas of the US because of its terrain and many water crossings.
But one NWS forecast earlier in the week had called for up to six inches of rain, said Nim Kidd, chief of the Texas Division of Emergency Management.”It did not predict the amount of rain that we saw,” he said.
Officials said they had not expected such an intense downpour of rain, equivalent to months’ worth in a few short hours, insisting that no one saw the flood potential coming.
One river near Camp Mystic rose 22ft in two hours, according to Bob Fogarty, meteorologist with the NWS’s Austin/San Antonio office. The gauge failed after recording a level of 29.5ft.
A wall is missing on a building at Camp Mystic in Hunt, Texas. Pic: AP/Julio Cortez
Bedding items are seen outside sleeping quarters at Camp Mystic. Pic: AP/Julio Cortez
A Sheriff’s deputy pauses while searching for the missing in Hunt, Texas.Pic: AP/Julio Cortez
“People, businesses, and governments should take action based on Flash Flood Warnings that are issued, regardless of the rainfall amounts that have occurred or are forecast,” Jonathan Porter, chief meteorologist at AccuWeather, said in a statement.
“We know we get rain. We know the river rises,” said Kerr County Judge Rob Kelly, the county’s top elected official. “But nobody saw this coming.”
Judge Kelly said the county considered a flood warning system along the Guadalupe River that would have functioned like a tornado warning siren about six or seven years ago, before he was elected, but that the idea never got off the ground because “the public reeled at the cost”.
A drone view of Comfort, Texas. Pic: Reuters
Officials comb through the banks of the Guadalupe River in Hunt, Texas. Pic: AP/Julio Cortez
Homeland Security Secretary Kristi Noem was asked during a news conference on Saturday whether the flash flood warnings came through quickly enough: “We know that everyone wants more warning time, and that is why we are working to upgrade the technologies that have been neglected for far too long.”
Presidential cuts to climate and weather organisations have also been criticised in the wake of the floods after Donald Trump‘s administration ordered 800 job cuts at the science and climate organisation NOAA, the parent organisation of the NWS, which predicts and warns about extreme weather like the Texas floods.
A 30% cut to its budget is also in the pipeline, subject to approval by Congress.
Read more from Sky News:
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Professor Costa Samaras, who worked on energy policy at the White House under President Joe Biden, said NOAA had been in the middle of developing new flood maps for neighbourhoods and that cuts to NOAA were “devastating”.
“Accurate weather forecasts matter. FEMA and NOAA matter. Because little girls’ lives matter,” said Frank Figliuzzi, a national security and intelligence analyst at Sky’s US partner organisation NBC News.
Elon Musk says he has created a new political party – the America Party –
after asking his followers if he should do so in an online poll.
It follows his public falling out with Republican President Donald Trump.
On Friday, the billionaire had asked his followers on X whether a new US political party should be created.
On Saturday evening he wrote on the same platform: “By a factor of 2 to 1, you want a new political party and you shall have it!
“When it comes to bankrupting our country with waste & graft, we live in a one-party system, not a democracy.
“Today, the America Party is formed to give you back your freedom.”
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Trump threatens to ‘put DOGE’ on Musk
The world’s richest man made the announcement just one day after President Trump signed a tax-cut and spending bill into law on Friday, which Musk had fiercely opposed.
Musk had previously said we would form and fund a new political party to unseat lawmakers who supported the bill.
From bromance to bust-up
The Tesla boss backed Trump’s election campaign with more than a quarter of a billion dollars, later rewarded with a high profile role running the newly created department of government efficiency (DOGE).
But observers of the two men, both with huge wealth and reputations, wondered how long the bromance would last.
Donald Trump gave Musk a warm send-off in the Oval Office in May. Pic: Reuters
In May Musk left the role, still on good terms with Trump but criticising key parts of his legislative agenda.
After that, the attacks ramped up, with Musk slamming the sweeping tax and spending bill as a “disgusting abomination” and Trump hitting back in a barbed tit-for-tat.
Trump earlier this week threatened to cut off the billion-dollar federal subsidies that flow to Musk’s companies, and said he would even consider deporting him.
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