Asia Stocks Surge on US-China Trade Deal Breakthrough

AFP/APP

HONG KONG: Asian equities surged Monday as investors cheered a breakthrough in US-China trade talks that set the stage for leaders Donald Trump and Xi Jinping to finalise a deal, averting an escalation in the world’s biggest trade dispute.

Markets rallied after US Treasury Secretary Scott Bessent said the threat of the US president imposing an additional 100 percent tariff on Chinese goods was “effectively off the table” following weekend negotiations in Malaysia.

“The tariffs will be averted,” Bessent told ABC News on Sunday, adding that China agreed to delay rare earth export controls and make “substantial” soybean purchases.

Chinese Vice Premier He Lifeng said the two sides reached a “preliminary consensus” on tariffs, export controls, and fentanyl cooperation, describing the talks as “candid, in-depth, and constructive.”

The progress paves the way for Trump and Xi to meet Thursday in South Korea on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit — their first face-to-face meeting since Trump returned to office.

Asian shares rose in early trade, with stocks in Japan and South Korea jumping about two percent, each breaching key milestones. Hong Kong, Shanghai, and Taipei markets also opened on a positive note.

The upbeat sentiment followed a strong finish on Wall Street Friday, after benign US inflation data set the stage for another Federal Reserve interest rate cut.

Trump expressed confidence about reaching a comprehensive agreement with Beijing.

“They want to make a deal, and we want to make a deal,” he told reporters Sunday in Kuala Lumpur.

The Republican president is on a five-day Asia tour that includes stops in Malaysia, Japan, and South Korea, with trade deals topping the agenda at every destination.

Futures for US copper surged on the trade deal optimism, bolstering the outlook for global demand.

The breakthrough came after months of escalating tensions, with Trump threatening a massive tariff hike in response to China’s October expansion of rare earth export controls — a move Washington called “economic coercion.”

Under the framework deal, China would defer its rare earth restrictions “for a year while they reexamine it,” Bessent said.

Key Figures at Around 0230 GMT

Market Index/Commodity Change Latest Value

Tokyo – Nikkei 225 ↑ 2.1% 50,321.49

Hong Kong – Hang Seng Index ↑ 1.0% 26,425.51

Shanghai – Composite ↑ 0.9% 3,985.83

West Texas Intermediate (WTI) ↑ 0.2% $61.62 per barrel

Brent North Sea Crude ↑ 0.2% $66.09 per barrel

Euro/Dollar ↑ $1.1632 (from $1.1627 on Friday)

Pound/Dollar ↑ $1.3323 (from $1.3296)

Dollar/Yen ↑ 152.99 (from 152.85 yen)

Euro/Pound ↓ 87.31 pence (from 87.43 pence)

New York – Dow Jones ↑ 1.0% 47,207.12 (close)

London – FTSE 100 ↑ 0.7% 9,645.62 (close)