China and US announce 90-day pause on tariffs
China and the US have watered down tit-for-tat tariffs in a landmark 90-day pause that represents a de-escalation of their ongoing trade war.
Both countries had imposed tariffs of over 100 per cent on one another in the fallout to President Trump’s ‘Liberation Day’ at the beginning of April, causing the UN to suggest that the world economy was in a “recessionary phase”.
But a landmark deal has been struck in Geneva, where negotiators met over the weekend.
US tariffs on Chinese goods will now fall from 145 per cent to 30 per cent, while China have lowered tariffs of 125 per cent to ten per cent.
US treasury secretary Scott Bessent suggested the 90-day pause on aggressive tariffs could help ease dealmaking between the world’s two largest economies.
“We’ve had a plan. We have a process in place. And now with the Chinese, we have a mechanism for continued talks,” he said.
Trade envoy Jamieson Greeson said that the deal was made due to “mutual understanding” as he said the US goods trade deficit with China remained a concern for the Trump administration.
Stocks in London bounced back following the announcement after the FTSE 100 jumped by 0.1 per cent.
The Hang Seng in Hong Kong rose by more than one per cent.
Matt Basi managing director of London Capital Group said: “The two superpowers finding a route forward in trade negotiations would be a huge step in settling traders’ uncertainties about the outlook for equity markets.
“That said, we’re quickly becoming accustomed to rapid policy change, and even if an initial deal is struck, there will be many who are hesitant to bet on it being a lasting resolution…”
US-UK deal on tariffs
It is the second deal made by the Trump administration in a week.
Last week, the US and UK announced a deal that secured lower tariffs on car exports and tariffs on steel and aluminium.
The UK – like most other countries around the world – still faces “baseline” ten per cent tariffs on all goods exported to the US.
Those tariffs will come into effect in less than three months unless another deal can be struck.
Bank of England Governor Andrew Bailey has heralded the trade deal struck between the UK and US as “good news”, but cautioned that the UK’s economic prospects will still depend on agreements the US reaches with other trading partners.