US-China Trade Talks Show Substantial Progress

The US and China have made "substantial progress" in key trade talks held in Geneva, according to US Treasury Secretary Scott Bessent and China's Vice Premier He Lifeng. The talks, which were described as "productive and constructive" and "in-depth" and "candid", were the first face-to-face meetings between the two countries since US President Donald Trump imposed tariffs on Chinese imports in January. The White House called it a "trade deal", but gave no further details, with a joint statement expected on Monday. Stocks in mainland China and Hong Kong rose, and US stock futures were sharply higher, after the announcement, with some trade experts expecting cuts to tariffs.

U.S. Treasury Secretary Steven Mnuchin's deputy, Scott Bessent, and U.S. Trade Representative Robert Lighthizer's deputy, Jamieson Greer, met with Chinese Vice Premier He Lifeng in Switzerland and made "substantial progress" in tariff talks. The details of the negotiations were not disclosed, but Greer suggested an agreement had been reached. The talks aimed to scale back tariffs imposed by the U.S. and China on each other's goods, which have disrupted trade worth over $660 billion. President Trump claimed "great progress" was made and expressed hope for an opening up of China to American business. Chinese officials have pushed for the U.S. to drop its tariffs first, while the U.S. prioritizes closing its trade deficit with China, which was a record $263 billion last year.

US stock futures rose on Monday after the Trump administration announced a "trade deal" with China following negotiations over the weekend. Dow Jones Industrial Average futures jumped 422 points, or 1%, while S&P 500 and Nasdaq-100 futures climbed 1.38% and 1.94%, respectively. Treasury Secretary Scott Bessent said the talks were "productive" but didn't provide specifics. The news comes after President Donald Trump unveiled 145% tariffs on Chinese goods last month, prompting Beijing to retaliate with 125% duties on US goods. Investors will be watching for signs on how rising trade tensions are impacting the economy, with the consumer price index reading due on Tuesday.

The US and China are set to announce progress made during a weekend of marathon trade negotiations in Geneva, Switzerland. US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer said "substantial progress" had been made, while Chinese Vice Premier He Lifeng described the talks as "candid, in-depth and constructive." The two sides plan to finalize the details of a "consultation mechanism" and release a joint statement on Monday. While it's unclear if a firm agreement has been reached on reducing tariffs, global investors are cheering the potential thaw in the trade war, with Dow futures rising 1%, S&P 500 futures up 1.3%, and Nasdaq Composite futures up 1.7%.

China is hosting President Luiz Inácio Lula da Silva of Brazil and other Latin American officials to strengthen ties with the region, as the US under President Trump attempts to draw them closer with a modern version of the Monroe Doctrine. China has become a significant economic partner for many Latin American countries, purchasing large quantities of minerals and resources, and investing in infrastructure projects. Latin American governments are seeking to maintain good relations with China as a counterweight to US power and to diversify their economies. China's leader Xi Jinping is expected to offer more trade deals, including purchasing soybeans and other commodities, to keep the region onside. The US, on the other hand, has unsettled leaders in Latin America with its tariffs and threats, such as taking over the Panama Canal. Countries like Brazil and Mexico are navigating their relationships with both the US and China, with some imposing tariffs on Chinese goods to protect local industries.

The offshore yuan strengthened to 7.22 per US dollar as reports emerged of a breakthrough in China-US trade talks, with both sides indicating "substantial progress" in their negotiations. China's central bank set the onshore yuan fixing rate at 7.2066 against the US dollar, also showing a slight gain. The talks, held in Geneva, were the first formal trade negotiations between the two economies since the US ramped up tariffs on Chinese goods.

Asian stocks rose on Monday following U.S.-China trade talks over the weekend, which showed "substantial progress" in easing trade tensions. Benchmark indexes in Japan, South Korea, Hong Kong, and Shenzhen gained, with futures indicating similar gains for the S&P 500. The talks, the first since tariffs were ratcheted up, raised hopes that tariffs could be lowered, potentially averting an economic downturn. Economists have warned that the trade war has increased the risk of a recession, with the World Trade Organization forecasting a potential 7% cut in global GDP.

Asia-Pacific markets mostly rose on Monday following the White House's announcement of a "trade deal" with China, although details were not provided. Indian stocks led the gains after a fragile ceasefire with Pakistan held over the weekend, with the Nifty 50 surging 2.29% and the BSE Sensex gaining 2.27%. Hong Kong's Hang Seng Index rose 0.88%, while mainland China's CSI 300 index increased 0.61%. Japan's Nikkei 225 fell 0.17%, but South Korea's Kospi index rose 0.49% and Australia's S&P/ASX 200 increased 0.17%. U.S. futures jumped as investors await further details on the trade deal. Bitcoin slid but remained above $100,000, while spot gold plunged as investors cheered progress in U.S.-China trade talks.

Yao Yang, a Chinese economist and professor, discusses the US-China trade war, stating that the US is recognizing the unsustainability of extreme tariffs, which have led to weak economic data and reduced investments. He believes a deal is likely, with both sides needing to take a step back and potentially rolling back tariffs to around 34%. The US may also demand China increase purchases of American goods, such as farm products and Boeing planes, as part of any negotiation.