Markets rally after pause in US-China trade war

Stocks rallied yesterday after Chinese and US officials made “substantial progress” at trade talks in Geneva and slashed their tit-for-tat tariffs for 90 days, fuelling hopes the two sides will pull back from a standoff that has rattled global markets.

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Investors have been on a roller-coaster ride since Donald Trump unveiled eye-watering tolls on trading partners on April 2, with the heftiest one saved for Beijing, raising concerns of a trade war between the economic superpowers.

The US president eventually hiked the measures against China to 145%, which were met with China's retaliatory rates of 125% on US products.

However, there have been signs of an easing of tensions and after two days of highly anticipated negotiations in Geneva, the two countries hailed progress towards ending a crisis that fuelled fears of a global recession.

Yesterday the two said they would slash their levies to cool tensions and give officials time to resolve their differences. Ina joint statement, the US side said it would reduce tolls to 30% while Chinese tariffs on American goods would be cut to 10%.