Wall Street surges after US, China agree to slash tariffs for 90 days in pivotal thaw of trade tensions
As Donald Trump took off for a three-day tour of the Middle East, the US stock market spiked after China and the US paused tariffs for an initial 90-day period. See the details.
US stocks surged after the White House and China agreed to slash rates for 90 days in what could be a pivotal thawing of trade tensions between the world’s largest economies.
The Dow Jones Industrial Average jumped 1,044 points, or 2.5 per cent, while the S&P 500 and Nasdaq soared 2.9 per cent and 4 per cent, respectively, on Monday local time.
US President Donald Trump was buoyed by the spike as he jetted out of Washington for a three-day tour of the Middle East.
“Now I’m going to depart on a historic visit,” Mr Trump told reporters at the White House of his visit to Saudi Arabia, Qatar and Untied Arab Emirates this week.
Treasury Secretary Scott Bessent said talks with China over the weekend in Switzerland had been “very productive,” and announced the two countries had agreed to lower tariff rates by 115 per cent for 90 days.
That brings the US tariffs on Chinese goods down to 30 per cent, and the Chinese tariffs on US imports down to 10 per cent.
A separate 20 per cent tax on Chinese imports that President Trump attributed to the nation’s involvement in fentanyl smuggling will remain in place.
Mr Bessent also gave investors hope for a long-term trade agreement in the near future.
“I would imagine in the next few weeks we will be meeting again to get rolling on a more fulsome agreement,” Mr Bessent told CNBC.
Shares in tech and electronics firms jumped on Monday, as many of these products are produced in Chinese factories at low costs.
Shares in Apple, which makes the majority of its iPhones in China, spiked 5.1 per cent, while Amazon’s stock soared 8.6 per cent.
Consumer tech brands welcomed the news, with Dell Technologies shares jumping 7 per cent.
Retailers selling televisions, laptops and smart devices also popped Monday morning.
Shares in Best Buy rocketed up 8.1 per cent. Nike was also up 8 per cent.
Prior to Monday’s temporary pause, consumers and businesses were facing steep additional costs from the tariffs, which threatened to send prices sky-high on electronics, clothing and toys.
While the new tariff rates will still add to costs, they’re much less dramatic than the initial 145 per cent tax that US President Donald Trump levied on China last month, and Beijing’s retaliatory 125 per cent duty.
The S&P 500 opened above where it stood on April 2, when Mr Trump initially revealed the harsh “reciprocal” tariffs on his so-called “Liberation Day.”
In a joint statement, China and the United States said they recognised the “importance of their bilateral economic and trade relationship to both countries and the global economy” and “the importance of a sustainable, long-term, and mutually beneficial economic and trade relationship”.
The statement also said they were moving forward “in the spirit of mutual opening, continued communication, co-operation, and mutual respect”.
This comes after a weekend of trade deals in Switzerland, where top Trump administration officials announced that the two countries had agreed on a deal to help resolve the trade war.
“I’m happy to report that we’ve made substantial progress between the United States and China in the very important trade talks,” US Treasury Secretary Scott Bessent told reporters in Geneva.
Trade Representative Jamieson Greer, who also took part in the two days of closed-door talks with Chinese Vice Premier He Lifeng, said that the differences between the sides were “not so large as maybe thought”.
After the first day of negotiations, Mr Trump had posted on Truth Social that the discussions had been “very good”, describing them as “a total reset negotiated in a friendly, but constructive, manner”.
Ahead of the meeting at the discrete villa residence of the Swiss ambassador to the United Nations in Geneva, Mr Trump signalled he might lower the tariffs, suggesting on social media that an “80 per cent Tariff on China seems right!” However, his press secretary Karoline Leavitt later clarified that the United States would not lower tariffs unilaterally. China would also need to make concessions, she said.
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WHITE SOUTH AFRICAN REFUGEES ARRIVE IN US
Dozens of white South Africans granted refugee status have arrived in the US, even as the Trump administration generally halted refugee admissions.
But the white Afrikaners who have accepted resettlement in the United States did not face “any form of persecution” in South Africa, the foreign ministry said on Monday.
It came hours after a first group of 49 white South Africans flew out of Johannesburg following US President Donald Trump’s offer to grant refugee status to white Afrikaners.
Mainly descendants of Dutch settlers, Mr Trump has said white Afrikaners face “racial discrimination” in South Africa, heightening tensions between the two countries.
“They can’t provide any proof of any persecution because there is not any form of persecution to white South Africans or to Afrikaners South Africans,” Foreign Minister Ronald Lamola told reporters.
Their claims that white farmers are targeted for murder – despite official data that most victims of killings are young black men in urban areas – have morphed into a myth of a “white genocide”, also repeated by Mr Trump.
The US president, whose tycoon ally Elon Musk was born in South Africa, said in February he would prioritise access to a refugee program “for Afrikaners in South Africa who are victims of unjust racial discrimination”.
Prominent Afrikaner author Max du Preez said the resettlement was “beyond absurd” as South Africa had bodies to deal with any form of discrimination.
“This is about Trump and MAGA, not about us. Its about their hatred for DEI,” he told AFP, referring to diversity programs that have become a frequent Trump target.
“The people who have now fled have probably been motivated by financial considerations and/or an unwillingness to live in a post-apartheid society where whites no longer call the shots,” he said.
Whites, who make up 7.3 per cent of the population, generally enjoy a higher standard of living than the black majority of the country. They still own two-thirds of farmland and on average earn three times as much as black South Africans.
‘I MUST BE ALLOWED TO DO THE JOB’: TRUMP’S IMMIGRATION SPRAY
Donald Trump took to his social media platform Truth Social to claim that 21 million violent and illegal immigrants were reducing the US to a “third world” nation.
Mr Trump’s rant comes as he faces opposition at the highest judicial level for his deportations of illegal aliens without due process.
President Trump signed an executive order on Friday to create a federally funded self-deportation program with paid flights and an “exit bonus” for any who seek to “voluntarily and permanently” leave the US.
Earlier, in a statement posted to the White House’s website, Mr Trump lashed out at immigrants, blaming “a full-scale invasion” of those who stay in the US illegally for crime and violence.
“Illegal aliens who stay in America face punishments, including — sudden deportation, in a place and manner solely of our discretion. TO ALL ILLEGAL ALIENS: BOOK YOUR FREE FLIGHT RIGHT NOW!” Mr Trump wrote in a post to Truth Social.
Anyone who does not self-deport, Mr Trump said, can face “significant jail time, enormous financial penalties, confiscation of all property, garnishment of all wages, imprisonment and incarceration, and sudden deportation in a place and manner solely of our discretion.”
TRUMP TO ACCEPT UNPRECEDENTED LUXURY GIFT
US President Donald Trump is set to receive a “flying palace” Boeing 747-8 jumbo jet from Qatar’s royal family, which he will use as Air Force One, according to a report.
Mr Trump, 78, intends to use the aircraft — called the most luxurious private jet in the world — as an interim presidential jet while Boeing completes the next generation Air Force One fleet following years of frustrating delays and cost-overruns.
The jumbo-jet, valued at $400 million (A$623m), will then potentially transferred it to the Trump presidential library foundation as the president leaves office, sources told ABC News.
The US president is heading to the Middle East this week for his second foreign trip of his second term, and will tour Saudi Arabia, Qatar, and the United Arab Emirates.
Officials are expected to unveil the plans during Mr Trump’s stop in Qatar, according to the report.
Mr Trump previously toured the luxurious plane at West Palm Beach International Airport in February.
Currently, the US has two old Boeing 747-200 jumbo jets for Air Force One — the designation for any plane that the president is on — which have been in operation since the 1990s.
Air Force One jets have to be equipped with state-of-the-art communications and defensive systems to protect the president, which makes its development expensive and complicated.
During his first term, the Trump administration awarded Boeing a $3.9 billion (A$6.1bn) contract in 2018 to produce two new presidential planes for use as Air Force One. That project is not set be get completed until 2029, according to an estimate from Boeing last year.
The New York Times reported that the plane is the biggest foreign gift ever received by a US adnimistration and would be donated to President Trump’s presidential library, allowing him to use it after he leaves office.
IRAN HAILS US NUCLEAR TALKS AS ‘DIFFICULT BUT USEFUL’
Iran and the United States wrapped up nuclear talks in Oman on Sunday with no apparent breakthrough in a public standoff over enrichment, but with both sides confirming plans for future negotiations.
This was the fourth round of talks that began nearly a month ago, marking the highest-level contact between the two foes since Washington withdrew in 2018 from a landmark nuclear deal, during President Donald Trump’s first term.
Both sides had reported progress in the previous three rounds, and on Sunday Iran said the meeting was “difficult but useful” while a senior US official said Washington was “encouraged”.
The official, speaking on condition of anonymity, said Washington was “encouraged by today’s outcome and look forward to our next meeting, which will happen in the near future”, without specifying when.
1000 TRANSGENDER TROOPS TO BE REMOVED FROM US MILITARY
The US military will “immediately” start the process of removing some 1000 transgender troops and will force out those who do not leave voluntarily by early June, the Pentagon said.
President Donald Trump issued an executive order in January banning transgender military service, and the US Supreme Court ruled this week that the ban could take effect while litigation challenging it plays out.
“The Military Departments will immediately begin processing for separation service members who previously self-identified for voluntary separation prior to March 26, 2025,” a memo from Pentagon chief Pete Hegseth said.
Approximately 1000 troops who identified as having gender dysphoria diagnoses fall into that category, Pentagon spokesman Sean Parnell said in a statement.
There were a total of 4240 currently serving troops with such diagnoses as of late last year, according to a senior defence official, and the memo said those who do not voluntarily leave by June 6 for active-duty troops and the following day for reserves will be removed.
“On conclusion of the self-identification eligibility window, the Military Departments will initiate involuntary separation processes,” the memo said.
In his January 27 executive order, Mr Trump stated that “expressing a false ‘gender identity’ divergent from an individual’s sex cannot satisfy the rigorous standards necessary for military service.”
– with AFP
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Originally published as Wall Street surges after US, China agree to slash tariffs for 90 days in pivotal thaw of trade tensions