Asian equities surged on Monday after a breakthrough in U.S.–China trade talks, setting the stage for President Donald Trump and President Xi Jinping to finalize a deal and avert an escalation of the world’s biggest trade dispute. U.S. Treasury Secretary Scott Bessent said the threat of an additional 100 percent tariff on Chinese goods is “effectively off the table” following weekend negotiations in Malaysia. “The tariffs will be averted,” he declared, adding that China agreed to delay rare‑earth export controls and make “substantial” soybean purchases.
Chinese Vice Premier He Lifeng described the talks as “candid, in‑depth, and constructive,” noting that the two sides reached a “preliminary consensus” on tariffs, export controls and fentanyl cooperation. This progress paves the way for Trump and Xi to meet on Thursday in South Korea on the sidelines of the Asia‑Pacific Economic Cooperation summit— their first face‑to‑face encounter since Trump returned to office.
Asian markets opened higher. Stocks in Japan and South Korea jumped about two percent, breaching key milestones, while Hong Kong, Shanghai and Taipei also posted gains. The upbeat sentiment followed a strong finish on Wall Street on Friday, after benign U.S. inflation data set the stage for another Federal Reserve interest‑rate cut. Trump expressed confidence in reaching a comprehensive agreement, saying, “They want to make a deal and we want to make a deal.” The Republican president is on a five‑day Asia tour, with trade deals topping the agenda at every stop.
Futures for U.S. copper surged on trade‑deal optimism, bolstering the outlook for global demand. The breakthrough comes after months of escalating tensions, during which Trump threatened a massive tariff hike in response to China’s October expansion of rare‑earth export controls. Under the framework deal, China would defer its rare‑earth restrictions “for a year while they reexamine it,” according to Bessent.
Key market figures around 02:30 GMT showed the Tokyo Nikkei 225 up 2.1 percent to 50,321.49, the Hong Kong Hang Seng Index up 1 percent to 26,425.51, and the Shanghai Composite up 0.9 percent to 3,985.83. Oil prices edged higher, with West Texas Intermediate rising 0.2 percent to $61.62 per barrel and Brent North Sea Crude up 0.2 percent to $66.09 per barrel.
The development in U.S.–China trade talks is significant because it could lead to a comprehensive agreement and ease tensions between the world’s two largest economies. The upcoming Trump‑Xi meeting is expected to be crucial in finalizing the deal and averting further escalation. As the talks progress, global markets will remain vigilant, watching for any signs of a breakthrough or potential setbacks.
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