Has Trump chanced upon a winning hand with China?

Hot on the heels of last week's trade agreement with the UK consider it the hors d'oeuvre - Donald Trump, America's tubthumping president, has delivered a much bigger main course: a potential deal with China.

- JAMES MOORE

The two nations, which had elevated tariffs on each other's exports to absurd levels - the US imposing a levy of 145 per cent on Chinese imports, China charging 125 per cent on goods from the US – have agreed a temporary pause.

These tariffs, announced during the trade war that escalated between the pair in recent weeks, are gone – for now – and some of Trump’s “Liberation Day” charges have been suspended. China – again, for 90 days – is offering concessions of its own. However, the charges imposed before 2 April remain in place.

According to research consultancy Capital Economics, what this means in practice is that the effective US tariff on goods from China will fall to around 40 per cent, after product exclusions are factored in. The effective tariff rate on goods imported by China from the US reduces to around 25 per cent. So in effect, for exporters, the Himalayas have been traded in for the Alps. Which are still tough to climb.

What happens next will depend on the talks, and there are no guarantees even if the markets think it’s all over. They were delighted, with Hong Kong’s Hang Seng particularly frothy. It shot up by nearly 3 per cent, surging through the 23,000 point barrier, leading a global charge. In Europe, Germany’s Dax and France’s Cac 40 also both jumped.