Business
US and China agree framework of trade deal ahead of Trump-Xi meeting
Michael RaceBusiness reporter
ReutersThe US and China have agreed the framework of a potential trade deal that will be discussed when their respective leaders meet later this week, the US treasury secretary has said.
Scott Bessent told the BBC’s US news partner CBS that this included a “final deal” on TikTok’s US operations and a deferral on China’s tightened rare earth minerals controls.
He also said he did not anticipate the 100% tariff on Chinese goods threatened by President Donald Trump coming into force, while China will resume substantial soybean purchases from the US.
Both nations are seeking to avoid further escalation in a trade war between the world’s two largest economies.
Trump and Chinese President Xi Jinping are due to hold talks on Thursday in South Korea.
Bessent met senior Chinese trade officials on the sidelines of the Association of Southeast Asian Nations (Asean) summit in Malaysia, which Trump is also attending as part of a tour of Asia. Beijing said they had “constructive” discussions.
Bessent said the countries had “reached a substantial framework for the two leaders”, adding: “The tariffs will be averted.”
The Chinese government said in a statement that both negotiating teams “reached a basic consensus on arrangements to address their respective concerns”.
“Both sides agreed to further finalise specific details,” they added.
Trump’s tariff tactics
Since Trump re-entered the White House, he has imposed and threatened sweeping tariffs on imports from overseas on various countries, arguing that the policy would help boost US manufacturing and jobs. The introduction of tariffs has resulted in many countries, including the UK, agreeing new deals with the US.
But the steepest levies he has threatened have been levelled at China. Beijing has hit back with measures of its own, though the two agreed to hold off implementing the levies while pursuing a trade deal.
However, earlier this month Trump said he would impose an additional 100% tarriff on Chinese goods from November in response to China tightening restrictions on export of rare earths – materials essential to the production of many electronics. The US president accused Beijing of “becoming very hostile” and trying to hold the world “captive”.
China processes around 90% of the world’s rare earths, which go into everything from solar panels to smartphones, making supply of them to US manufacturers a key bargaining chip.
The last time Beijing tightened export controls – after Trump raised tariffs on Chinese goods early this year – there was an outcry from many US firms reliant on the materials.
China will “delay that for a year while they re-examine it”, Bessent told a different news show, This Week, on Sunday.
Another issue of contention is soybeans, of which China is the world’s biggest buyer. As the trade war began heating up, China halted all orders, hurting US farmers.
Bessent hinted the boycott may soon be over but refused to give details.
“I’m actually a soybean farmer, so I have felt this pain too… I think we have addressed the farmers’ concerns,” he said on This Week.
“I believe when the announcement of the deal with China is made public that our soybean farmers will feel really good about what’s going on for this season and the coming seasons for several years.”
TikTok deal done?
Bessent also said a deal had been agreed on video-sharing platform TikTok’s US arm, with Trump and Xi left to “consummate that transaction on Thursday”.
The US has sought to prise the app’s US operations away from Chinese parent company ByteDance over national security concerns.
TikTok was previously told it had to sell its US operations or risk being shut down, but Trump has delayed implementing the ban four times to facilitate negotiations, and has extended the deadline again to December.
The White House announced last month that US companies would control TikTok’s algorithm and Americans would hold six of seven board seats for the app’s US operations.
While Trump initially called for TikTok to be banned during his first term, he has since changed course. He turned to the hugely popular platform to boost his support among young Americans during his successful 2024 presidential campaign.
On Sunday, Washington also announced a slew of trade deals with Malaysia and Cambodia and framework agreements with Thailand and Vietnam.
The region, which is heavily dependent on trade with the US, is among the hardest hit by Trump’s tariffs.
The US will keep its tariff rate of up to 20% on each of the countries’ goods, but could carve out exemptions on certain products.
“Our message to the nations of South East Asia is that the United States is with you 100% and we intend to be a strong partner for many generations,” Trump said in Malaysia, the first stop of his week-long Asian tour.
Trump signed agreements involving the trade of critical minerals with Thailand and Malaysia. These expand the US’ access to rare earth elements and other metals beyond China.
Trump also announced framework agreements for the US to trade more goods with Cambodia and Thailand.
The White House and Vietnam announced “unprecedented” trade access between the countries. Vietnam also agreed to buying Boeing jets worth more than $8bn (£6bn) from the US and American agricultural goods.
Additional reporting by Osmond Chia
Business
US markets today: Wall Street jumps after softer inflation update; Micron sparks AI rebound – The Times of India
US stock markets rallied on Thursday after a better-than-expected inflation update eased concerns over the interest rate outlook, while a strong earnings report from Micron Technology helped arrest the recent slide in artificial intelligence-linked stocks, AP reported.The S&P 500 rose about 1%, snapping a four-session losing streak. The Dow Jones Industrial Average climbed over 350 points, while the Nasdaq Composite gained around 1.4%, led by technology and semiconductor shares.Investor sentiment improved after data showed US inflation slowed to 2.7% last month, coming in below economists’ expectations. While inflation remains above the Federal Reserve’s 2% target, the softer reading raised hopes that the central bank could continue cutting interest rates next year to support a slowing job market.Some caution persisted with market participants noting that recent economic data have been volatile following the US government shutdown, and that upcoming inflation reports may provide a clearer signal.Technology stocks got a further boost from Micron Technology, which surged nearly 16% after posting stronger-than-expected quarterly profit and revenue and issuing an upbeat outlook. Chief executive Sanjay Mehrotra said demand linked to artificial intelligence accelerated across Micron’s businesses, reinforcing its role as a key “AI enabler”.The results helped ease worries that heavy spending on AI by major companies may not yield sufficient returns. Shares of Broadcom and Oracle, which had fallen sharply in recent sessions despite solid earnings, rebounded, while Nvidia also edged higher.Elsewhere, Trump Media & Technology Group jumped sharply after announcing an all-stock merger with nuclear technology firm TAE Technologies, marking its entry into the nuclear power space. Cintas also advanced after reporting strong earnings and announcing a share buyback programme.Global markets were mixed. European stocks posted modest gains after the Bank of England cut interest rates and the European Central Bank held policy steady, while Asian markets ended unevenly.In the bond market, US Treasury yields declined, with the 10-year yield falling to around 4.11%, reflecting optimism following the inflation data.
The Bank of England (BoE) announced on Thursday its decision to cut interest rates to 3.75 per cent, the fourth cut of the year.
For December’s vote, the bank’s nine-person Monetary Policy Committee (MPC) showed just a slight swing compared to last time out pre-Budget in November; a 5-4 split then favouring a hold became a 5-4 split in favour of cutting this time, with governor Andrew Bailey a key switcher.
Following falling inflation rates, poor economic figures and rising unemployment, it brings the base rate down to the lowest level in almost three years.
Here’s a brief rundown of what the current interest rate might mean for you:
What does the interest rate mean for mortgages?
Broadly speaking, as increasing interest rates over the last few years have meant mortgage repayments going up, then the reverse also holds true: lower rates, lower repayments. However, there are several important things to note.
Firstly, that it’s only the interest on the repayments which should change – your capital repayments will naturally decrease the more you pay off your mortgage. Secondly, the base rate isn’t the rate you are necessarily charged by your bank or lender for the mortgage – they’ll base theirs off the BoE rate but it doesn’t have to be the same.
More than half a million people do, however, have a mortgage which tracks the BoE interest rate and those will see an immediate change. Far more have fixed-term deals, which expire each year and need renegotiating – almost 2 million homes are expected to seek renewed deals in 2026.
If you’ve got a fixed term on a mortgage plan, you won’t see a change in any case until that comes to an end and you start a new one, but if you’ve already finished and moved onto a standard variable rate (SVR) deal, then you might see a change in your repayments.
New mortgage products tend to be based on swap rates – market agreements based on future expectations of interest rate movements – rather than the current bank rate, which is why there has been a recent battle between lenders dropping their rates even before the cut today.
What about savings accounts?
If you have money in a savings account, it’s the other side of the see-saw: rates going down mean you’ll earn less interest.
Get a free fractional share worth up to £100.
Capital at risk.
Terms and conditions apply.
ADVERTISEMENT
Get a free fractional share worth up to £100.
Capital at risk.
Terms and conditions apply.
ADVERTISEMENT
As there has been a bit of a fierce battle raging among banks and building societies for customers, it’s still possible to get good deals if you are happy to lock in money for a fixed period of time or contribute regular amounts, with several offering more than 4 per cent until recently.
However, it’s likely some will be removed from the market or have their rates altered in the coming days, while many of the best deals in easy access accounts have been below 4.5 per cent for a while now.
There are always terms and conditions to be met, so ensure any accounts you open suit your circumstances, but the opportunity still remains to save and earn money at a better rate than inflation, which currently sits around 3.2 per cent.
Do be aware of the amount of interest you can earn without being taxed, though. If your savings account interest rate isn’t fixed, banks can always change the rate you get up or down.
A tax-efficient way of saving is to use a Cash ISA, where everyone (for now!) has a £20,000 personal allowance each year, which will drop to £12,000 soon with the other £8,000 reserved for tax-free investing.
Bills and repayments
Credit card repayments and other types of personal loans are of course also affected by interest rates, as the amount they all charge for borrowing could be altered.
For credit card users (and especially for Buy Now Pay Later deals), it’s always ideal to pay off the full amount each month if you are able to, to avoid interest being charged at all – depending on your circumstances and the account type, they can be one of the more costly ways to borrow.
Again, it may not be immediate that lenders alter their rates after a base rate change, but get in touch with them to assess your options if you feel your repayments could or should be lower.
Michael RaceBusiness reporter
Getty ImagesInterest rates have been cut to 3.75%, the lowest level in almost three years, but further reductions are set to be a “closer call”, the Bank of England has said.
In a knife-edge vote, policymakers voted 5-4 in favour to lower rates from 4% reflecting concerns over rising unemployment and weak economic growth.
The Bank said rates were “likely to continue on a gradual downward path”, but warned judgements on further cuts next year would more contested.
Inflation is now expected to fall “closer to 2%” – the Bank’s target – next year, which is sooner than previous forecasts. However, the economy is predicted to see zero growth in the final few months of this year.
The decision to lower borrowing costs from 4% was widely expected, after figures this week showed inflation, the rate prices rise at, slowed further to 3.2% in the year to November.
“We still think rates are on a gradual path downward but with every cut we make, how much further we go becomes a closer call,” said the Bank’s governor, Andrew Bailey.
While the cut is likely to be good news for people looking to borrow cash or secure a mortgage, savers could see a reduction on their returns.
About 500,000 homeowners have a mortgage that “tracks” the Bank of England’s rate, and Thursday’s cut is likely to mean a typical reduction of £29 in monthly repayments.
Homeowners on standard variable rates are also likely to see lower payments, although the vast majority of mortgage customers have fixed-rate deals so are not affected by the latest decision.
The Bank said that, following the tax and spending policies announced in last month’s Budget and easing oil and gas prices, inflation was likely to fall close to 2% in the spring/summer of next year. Previously it did not expect this to happen until 2027.
Chancellor Rachel Reeves announced the government would cut £150 off household energy bills in the Budget, as well as freeze fuel duty and rail fares.
However, the Bank said weaker economic growth in November had led it to expect zero growth for the final few months of this year.
It said information gathered from businesses around the country suggested a “lacklustre economy”, with firms concerned by the speculation ahead of the Budget.
The Bank said consumers remained “cautious and keenly focused on value for money”, adding that food shops were “smaller than usual”.
“Some supermarkets have been concerned that the Budget will dampen spending on Christmas food and drink, but discounters say that early sales of lowered priced seasonal food are solid so far,” it added.
Latest figures showed the price of food was the main driver behind November’s drop in inflation.
The inflation rate has fallen in recent months, but this drop does not mean that prices are falling, rather they are rising at a slower rate.
Mr Bailey reiterated that the Bank believed inflation had passed its peak.
Reacting to the Bank’s decision, the chancellor said it was the “sixth interest rate cut since the election – that’s the fastest pace of cuts in 17 years, good news for families with mortgages and businesses with loans”.
But shadow chancellor Mel Stride said while lower interest rates would be “welcome news for many families”, the cut reflected “growing concerns about the weakness of our economy”.
“The economic mismanagement of Rachel Reeves has left the Bank of England with an impossible dilemma, balancing high inflation against a fragile economy.”
EPAThe Bank, which is independent of the government, sets interest rates in an attempt to try to keep consumer price rises under control.
The theory behind increasing interest rates to tackle inflation is that by making borrowing more expensive, more people will cut back on spending and that leads to demand for goods falling and price rises easing.
But it is a balancing act, as high interest rates can harm the economy as businesses hold off from investing in production and jobs.
The government has made growing the economy its main priority as part of its efforts to boost living standards.
In its most recent Monetary Policy Report, the Bank predicted UK economic growth would be 1.5% this year, but forecast it would fall to 1.2% next year before rising to 1.6% in 2027 and 1.8% in 2028.
Get our flagship newsletter with all the headlines you need to start the day. Sign up here.
Giants’ Jaxson Dart responds to Commanders’ plan to ‘go out hitting’ rookie quarterback
Meet the Linen Sheets That Will Last You a Lifetime
French menswear season to feature 35 shows, with two Paris debutantes, and Balenciaga return
-
Business5 days agoHitting The ‘High Notes’ In Ties: Nepal Set To Lift Ban On Indian Bills Above ₹100
-
Politics1 week agoTrump launches gold card programme for expedited visas with a $1m price tag
-
Tech1 week agoJennifer Lewis ScD ’91: “Can we make tissues that are made from you, for you?”
-
Business1 week agoRivian turns to AI, autonomy to woo investors as EV sales stall
-
Fashion1 week agoTommy Hilfiger appoints Sergio Pérez as global menswear ambassador
-
Business1 week agoCoca-Cola taps COO Henrique Braun to replace James Quincey as CEO in 2026
-
Sports1 week agoPolice detain Michigan head football coach Sherrone Moore after firing, salacious details emerge: report
-
Tech1 week agoGoogle DeepMind partners with UK government to deliver AI | Computer Weekly