World shares and US futures surged yesterday after the US and China announced they were suspending for 90 days most of the sharp tariff hikes each has imposed since US President Donald Trump began escalating his trade war.
For a 90-day period, the US is to cut tariffs on Chinese goods to 30 percent from as high as 145 percent, while China’s tariffs on US goods would fall to 10 percent from 125 percent, a joint statement said.
The agreement to allow time for more talks followed weekend negotiations in Geneva, Switzerland, that the US side said had made “substantial progress.”
Photo: AFP
The full impact on the tariffs and other trade penalties enacted by Washington and Beijing remains unclear, and much depends on whether they find ways to bridge differences during the suspension.
However, as trade envoys from the world’s two biggest economies blinked, finding ways to pull back from potentially massive disruptions to world trade and their own markets, investors rejoiced.
The TAIEX ended up 214.50 points, or 1.03 percent, at 21,129.54, on the back of improved market sentiment toward the US-China trade talks. Buying also focused on the bellwether electronics sector, with investors anticipating positive leads from the Computex trade show in Taipei, which is to run from Tuesday next week to Friday.
“Computex is coming,” Hua Nan Securities Investment Management Co (華南投顧) analyst Kevin Su (蘇俊宏) said. “Investors hope [artificial intelligence] chip designer Nvidia Corp CEO Jensen Huang (黃仁勳) will give positive leads in his speech at the event.”
Regional equities also climbed, with Hong Kong jumping 3 percent, while Shanghai — which closed before the tariff cuts were announced — was up 0.8 percent.
Tokyo, Sydney, Seoul and Wellington were all in the green. Paris and Frankfurt rose more than one percent, while London was also higher in early European trading.
Oil prices rallied, with US benchmark crude oil gaining US$1.66 to US$62.68 per barrel. Brent crude, the international standard, added US$1.63 to US$65.55 per barrel.
The US dollar surged against the yen, trading at 148.18 yen, up from 146.17. The euro fell to US$1.1107 from US$1.1209.
“The initial reaction to the weekend US-China talks [is] predictably encouraging,” Pepperstone Group research head Chris Weston said.
However, Bank J Safra Sarasin chief economist Karsten Junius was cautious.
“We expect financial markets to remain volatile over the coming months, as they have almost fully priced out negative economic surprises and could once again be disrupted by more serious obstacles in trade negotiations,” he said in a commentary. “In all likelihood, things may still get worse before they get better.”
Investors were also watching for developments in other flashpoints, including clashes between India and Pakistan.
The Sensex in Mumbai shot up 3.2 percent after India and Pakistan agreed to a truce after talks to defuse their most serious military confrontation in decades. Pakistan’s KSE 100 surged more than 9 percent.
Additional reporting by CNA and AFP
WEAKER ACTIVITY: The sharpest deterioration was seen in the electronics and optical components sector, with the production index falling 13.2 points to 44.5 Taiwan’s manufacturing sector last month contracted for a second consecutive month, with the purchasing managers’ index (PMI) slipping to 48, reflecting ongoing caution over trade uncertainties, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The decline reflects growing caution among companies amid uncertainty surrounding US tariffs, semiconductor duties and automotive import levies, and it is also likely linked to fading front-loading activity, CIER president Lien Hsien-ming (連賢明) said. “Some clients have started shifting orders to Southeast Asian countries where tariff regimes are already clear,” Lien told a news conference. Firms across the supply chain are also lowering stock levels to mitigate
Six Taiwanese companies, including contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), made the 2025 Fortune Global 500 list of the world’s largest firms by revenue. In a report published by New York-based Fortune magazine on Tuesday, Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), ranked highest among Taiwanese firms, placing 28th with revenue of US$213.69 billion. Up 60 spots from last year, TSMC rose to No. 126 with US$90.16 billion in revenue, followed by Quanta Computer Inc (廣達) at 348th, Pegatron Corp (和碩) at 461st, CPC Corp, Taiwan (台灣中油) at 494th and Wistron Corp (緯創) at
NEW PRODUCTS: MediaTek plans to roll out new products this quarter, including a flagship mobile phone chip and a GB10 chip that it is codeveloping with Nvidia Corp MediaTek Inc (聯發科) yesterday projected that revenue this quarter would dip by 7 to 13 percent to between NT$130.1 billion and NT$140 billion (US$4.38 billion and US$4.71 billion), compared with NT$150.37 billion last quarter, which it attributed to subdued front-loading demand and unfavorable foreign exchange rates. The Hsinchu-based chip designer said that the forecast factored in the negative effects of an estimated 6 percent appreciation of the New Taiwan dollar against the greenback. “As some demand has been pulled into the first half of the year and resulted in a different quarterly pattern, we expect the third quarter revenue to decline sequentially,”
RESHAPING COMMERCE: Major industrialized economies accepted 15 percent duties on their products, while charges on items from Mexico, Canada and China are even bigger US President Donald Trump has unveiled a slew of new tariffs that boosted the average US rate on goods from across the world, forging ahead with his turbulent effort to reshape international commerce. The baseline rates for many trading partners remain unchanged at 10 percent from the duties Trump imposed in April, easing the worst fears of investors after the president had previously said they could double. Yet his move to raise tariffs on some Canadian goods to 35 percent threatens to inject fresh tensions into an already strained relationship, while nations such as Switzerland and New Zealand also saw increased
RSS