US and China strike deal to slash tariffs

(Sharecast News) - The US and China are to significantly lower tariffs, it was confirmed on Monday, after a key agreement was struck in Geneva over the weekend. The world's two largest economies will now cut levies for the next 90 days. Washington will reduce tariffs on Chinese goods to 30% from 145%, while Beijing will lower duties to 10% from 125%.

Equities rallied on the news, while the dollar extended gains against the euro and yen. Gold, a safe-haven asset that has soared in recent weeks, fell back.

As at 0900 BST, Dow Jones futures were trading 2% higher.

Speaking at a press conference in Geneva, US Treasury secretary Scott Bessent said: "We want more balanced trade, and I think both sides are committed to achieving that.

"Neither side wants to a decoupling."

He added that the two sides now had a "mechanism for continued talks".

In Beijing, China's state broadcaster CCTV called the talks "candid, in-depth and constructive". Official media reports also noted that further discussions "on issues of mutual concern" were now expected.

The talks were the first formal negotiations held since Donald Trump upended world markets on 2 April, when he unveiled his sweeping global tariff regime. China retaliated with its own swingeing tariffs on US imports.

Neil Wilson, UK investor strategist at Saxo Markets, said: "The de-escalation seems better than just about anyone could hope for.

"This is buying time for a more comprehensive deal, [and] allows time for the process and mechanism, in the worlds of Bessent, to take place.

"He also stressed that strategic rebalancing of the global economy is still underway, although 'neither side want a decoupling', which is the sort of commentary the market is going to lap up. But it is not true - the US is absolutely trying to decouple."

Chris Beauchamp, chief market strategist at IG, said: "The bigger questions about the global economy remain. Stock markets have enjoyed a huge rebound over the past month, and are back to pricing in a lot of good news.

"Should the data start to worsen in the coming months, then markets could easily take another tumble."