The US and China have agreed to suspend tariffs for 90 days, boosting markets around the world.
08:17, Mon, May 12, 2025 | UPDATED: 09:05, Mon, May 12, 2025
FILE - President Donald Trump, left, poses for a photo with Chinese President Xi Jinping during a me (Image: AP)
Donald Trumphas backed down in his trade war with China after announcing a reduction of tariffs for an initial 90 day period. A joint statement from the White House said the nations recognised "the importance of their bilateral economic and trade relationship to both countries and the global economy".
Shares in Asia rose on Monday (May 12) after Washington said two days of trade talks between China and the US had made "substantial progress". In Hong Kong, the Hang Seng gained 1.3% to 23,155.18, while the Shanghai Composite Index picked up 0.7% to 3,366.15. Japan's Nikkei 225 added 0.4% to 37,644.26 while the Kospi in Seoul gained 0.9% to 2599.84. The FTSE-100 index at 8:15am was up 68.01 at 8622.81.
The rises came as Washington and Beijing agreed to temporarily lower some tariffs for 90 days, with China cutting tariffs on US goods to 10% from 125%. The United States said it would reduce duties in Chinese goods from 145% to 30%.
US Treasury Secretary Scott Bessent (R) and US Trade Representative Jamieson Greer (Image: Getty)
US Treasury Secretary Scott Bessent, speaking in Geneva where the talks were held, said neither China nor the United States wanted a "decoupling" but the US wants more balanced trade. He said both sides were committed to achieving that, according to Bloomberg.
President Donald Trump appears more willing to do a deal on tariffs with China after a forecast from Goldman Sachs showed inflation could double by the end of 2025 if the supply of cheaper goods arriving at US ports falls. A key plank of Mr Trump's presidential election campaign was to bring down inflation.
Tai Hui, a Chief Market Strategist at JP Morgan Asset Management, said the magnitude of the tariff reduction was larger than expected.
Hui added: "This reflects both sides recognising the economic reality that tariffs will hit global growth and negotiation is a better option going forward."
The 90-day period may not be sufficient for the two sides to reach a detailed agreement, but it keeps up pressure on the negotiation process, according to Hui.
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In April, Mr Trump raised US tariffs on China to a combined 145% and China retaliated by hitting US imports with a 125% levy.
Tariffs as high as that effectively amount to the two countries’ boycotting each other’s products, disrupting trade which last year topped £501.2billion ($660bn).
The Trump administration has imposed tariffs on countries worldwide, but its fight with China has been the most intense.
Mr Trump's import taxes on goods from China included a 20% charge intended to pressurise Beijing into doing more to stop the flow of the synthetic opioid fentanyl into the United States.
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English (US) · 