US and China agree to slash tariffs

Good morning and welcome to FirstFT at first of an necessary week for worldwide diplomacy. US President Donald Trump travels to the Gulf, China’s chief Xi Jinping hosts Latin American leaders in Beijing and Ukraine’s Volodymyr Zelenskyy and Russia’s Vladimir Putin are to satisfy for the first time since 2019. However we begin with an replace on the talks between US and Chinese language commerce negotiators in Geneva over the weekend in addition to these topics:

• Trump’s plans to slash drug costs

• A plea for extra writing like Warren Buffett

• And main AI programmes examined with routine work duties

The US and China have agreed to decrease tariffs for the subsequent 90 days in a serious de-escalation of the commerce warfare between the world’s two largest economies. Right here’s what it is advisable know.

What are the main points of what has been agreed? As a part of the settlement the US will decrease tariffs on Chinese language items from 145 per cent to 30 per cent and China will cut back duties on US imports from 125 per cent to 10 per cent in what represents the primary signal of financial tensions easing between the 2 financial superpowers since Donald Trump’s inauguration in January.

What has been the response to the announcement? World inventory markets prolonged their positive aspects after particulars of the settlement had been shared by the US following talks led by US Treasury secretary Scott Bessent and China’s vice-premier He Lifeng. US futures buying and selling suggests the S&P 500 index will leap 2.8 per cent on the open of commerce in New York. The greenback rallied 0.7 per cent in opposition to a basket of main currencies and gold, a standard haven, fell 2.3 per cent. “We wish extra balanced commerce, and I believe either side are dedicated to attaining that,” Bessent stated at a briefing in Geneva on Monday. “Neither facet needs a decoupling.” The US is anticipated to supply extra particulars of the settlement later. Follow our live blog for the latest developments.

• Evaluation: The wrestle by PPE maker NYES to remain afloat underscores the challenges confronted by the Trump administration to revive manufacturing by the largest commerce warfare in many years.

• Mohamed El-Erian: Current market developments are a loud reminder of the structural forces which have lengthy been in play and trace at “a brand new regular” as the worldwide economic system ventures into unknown and uncomfortable territory.

Donald Trump’s return to the White Home has triggered heightened tensions with China, elevating massive questions for international enterprise, markets and the remainder of the world. Be a part of us on Might 28 for insights into probably the most consequential geopolitical rivalry of our time. Register now and put questions to our panel.

Right here’s what else we’re maintaining tabs on as we speak:

• Israel-Hamas warfare: Edan Alexander, a 21-year-old, Israeli-American hostage held in Gaza, is expected to be released as we speak by Hamas.

• India-Pakistan tensions: The navy operations chiefs of India and Pakistan will focus on the subsequent steps for the nuclear-armed neighbours after a ceasefire was agreed over the weekend.

• Firms: Media group Fox is anticipated to report larger third-quarter income.

• Central banks: Federal Reserve Board governor Adriana Kugler speaks on ‘the US outlook amid international dangers at Eire’s central financial institution.

5 extra high tales

1. CATL, the world’s largest producer of batteries for electrical automobiles and power storage methods, stated it will elevate no less than $4bn in what is ready to be Hong Kong’s largest share sale and the biggest itemizing globally thus far this yr. The shares will begin buying and selling on Might 20, according to a prospectus filed with the Hong Kong stock exchange today.

2. The Kurdistan Employees’ occasion (PKK) stated as we speak it will finish “the armed wrestle” with the Turkish state and disband. The PKK, which is designated a terrorist group by Turkey and its western allies, has been in battle with the Turkish state for greater than 40 years. Learn extra on the historic move which can have main political and safety implications for the area.

3. Trump plans to make use of his govt powers to pressure pharmaceutical corporations to drastically cut back prescription costs by as much as 80 per cent within the US, regardless of fierce opposition from the trade and a few senior Republicans. On a social media put up in regards to the announcement anticipated later as we speak, the president additionally stated the US would introduce a “most favoured nation coverage”. Find out more on Trump’s plan.

• Jumbo jet diplomacy: Trump has defended a plan to accept a Boeing 747-8, valued at $400mn, from Qatar “freed from cost”.

4. A proposed legislation in California might derail efforts to liberalise the US authorized market and curb competitors from personal fairness and accounting teams in search of to take enterprise from conventional legislation corporations. The invoice, handed unanimously by the state meeting final month, comes as alternative-structure law firms spring up.

5. OpenAI and Microsoft are rewriting the phrases of their multibillion-dollar partnership in a high-stakes negotiation designed to permit the ChatGPT maker to launch a future preliminary public providing. FT reporters spoke to folks with information of the talks and here’s what they found out.

• Lunch with the FT: Over home-made pasta OpenAI chief Sam Altman and FT editor Roula Khalaf focus on the way forward for synthetic intelligence, his dispute with Elon Musk and rising up as the “nerdy Jewish kid in the Midwest”.

Information in-depth

When Xi Jinping took over the management of the Chinese language Communist occasion in late 2012 China had simply leapfrogged Japan to change into the world’s second-biggest economic system and was quick turning into America’s chief rival nuclear-armed superpower. The nation of 1.4bn folks was extremely depending on overseas nations for power however since then it has constructed resilience and independence into its power system and is now on its method to turning into the world’s first “electrostate”. What does that imply for worldwide relations and international commerce? This fascinating Big Read investigates.

We’re additionally studying . . . 

Chart of the day

US beef costs are hovering to document highs because the nation’s cattle stock reaches its lowest degree in additional than seven many years, placing additional strains on Individuals’ grocery payments. Meals costs, notably these of eggs, have been a supply of frustration for customers and a spotlight of the Trump administration that was elected on a promise to scale back inflation. Taylor Nicole Rogers studies on the outlook for beef prices.

Take a break from the information

The FT examined high apps from OpenAI, Anthropic, Google and extra with requests to jot down emails, guide journey and summarise the information. See how the main AI brokers in contrast on routine work tasks.