Following months of back-and-forth tariff escalation, US and Chinese officials announced this morning that they would reduce levies on each other's goods for 90 days and start a new round of trade negotiations.

Both sides are set to slash tariffs by 115% starting from Wednesday - with US tariffs on Chinese products falling to 30% and China's reciprocal tariffs on the US falling to 10%. You can read more about the deal in our earlier post.

The announcement gave global stock markets a boost, with US markets in particular seeing a significant surge. This follows major losses after Trump's initial "Liberation Day" tariff announcement last month.

Our New York Business Correspondent Natalie Sherman reports that the share prices for companies bringing goods from China are, unsurprisingly, going up.

Later in the day, Trump struck a triumphant tone in a statement from the White House, during which he said his administration had achieved a "total reset with China".

The US president described relations between the two countries as "very good" and said he did not expect US tariffs on Chinese imports to return to 145% after pause.

In Beijing, though, the mood is more sombre with Chinese businesses telling the BBC they expect more tariffs in the future.

We're ending our live coverage for the day. For more on the day's developments: What does the US-China tariff deal mean?

Image source, Reuters

Beijing residents that spoke to Reuters news agency earlier in the day have expressed some surprise that the US and China have paused their tariffs - but say they're glad to see an end to the sky-high levies, at least for now.

Alex Xu told the agency that it was "definitely good news" for the two countries.

"At least, things are moving towards a positive direction. After all, we must consider that the trade war with tariffs between China and the United States is a lose-lose situation for both sides", he adds.

Doli Yan says she is a bit surprised at the speed of the news - but did think an agreement would come eventually. "I didn't expect them to come to an agreement so fast", she says. "Based on how the US operates, I thought it would be a prolonged struggle and the negotiations would take a long time."

Image source, Reuters

The deal between the US and China to lower the most aggressive import tariffs could lessen the impact of the ongoing trade conflict between the countries and lower the need for the Federal Reserve to respond, Adriana Kugler, a member of the Fed's board of governors, has said.

Kugler described the deal as an "improvement", but said the tariffs were "still pretty high".

"I still expect an increase in prices and a slowdown in the economy" but "not to the same extent as before" Kugler told an economic symposium in Ireland, according to a report from Reuters.

The American Apparel Footwear Association welcomes the news of the US-China trade agreement but calls on the Trump administration to secure a broader, long-term deal.

The remaining tariffs "will still make for an expensive back to school and holiday season for most Americans," AAFA President and CEO Steve Lamar says in a statement.

Lamar says shipping disruptions due to tariffs - "which would take months to unwind" - could drive prices up even more.

"What’s needed now is a long-term deal — not just with China but with all our trading partners — so we can predictably make long term trade, investment, and sourcing decisions," Lamar says.

Fashion retailers like Adidas have recently warned that import taxes will lead to higher prices for trainers in the US.

Beijing will help struggling exporters cope with the implication of US tariffs, Chinese Commerce Minister Wang Wentao has told a roundtable of company executives.

"Faced with the unjust imposition of high tariffs on all our products, China has resolutely adopted countermeasures....winning international respect," Wang said, according to the ministry.

As a next step, he says, the ministry will "spare no effort in helping export companies resolve difficulties and providing them with more support in helping them expand in [international] markets and facilitating their stable development."

Wang made the remarks on the same day his boss, Vice-Premier He Lifeng, reached a deal in Geneva with US Treasury Secretary Scott Bessent, rolling back most of the tariffs against each other's goods for the next 90 days.

Michelle Fleury
World news correspondent

Peter Sand, Chief Analyst at Xeneta, tells me there’s now a rush by US firms to ship goods from China before a 90-day tariff deadline kicks in.

Speaking on the BBC’s Opening Bell, Sand described it as a “window of opportunity” for importers to benefit from lower tariff rates - though they could still face higher shipping costs if demand spikes and ports become congested.

The uptick in shipping comes after months of slowing trade between the world’s two largest economies.

Despite the breakthrough in US-China trade talks, Sand warned the outlook remains uncertain: “The business environment for global supply chains, in particular those connected to the US, is toxic at the moment.”

Investors are paying attention - shares in shipping giants Maersk and Hapag-Lloyd are both rallying today.

As we've been reporting, markets have been soaring since the announcement of the US-China tariff pause.

The S&P 500 is up roughly 2.6%, the Dow by about 2.2% and the Nasdaq by just over 3.5%.

These are levels close to where they started the year.

With the start of the trading day, we've seen the shares of companies like Amazon and Dell Technologies rising more than 7%, while Apple's stocks advanced over 5%.

Image source, EPA

Liv McMahon
Technology reporter

We reported earlier that Apple is thinking about raising prices for its next series of iPhones amidst the tariff hikes.

Coincidentally, Trump says he spoke to Apple’s boss Tim Cook earlier today.

Not much detail is known about the conversation aside from one comment - Trump says Cook “is going to be building a lot of plants in the US for Apple".

The firm has been trying to rely less on Chinese manufacturing, and has already committed to invest $500bn in the US.

But it’s got caught up in the tariff fallout simply because around 80% of its US-bound iPhones are made in China, according to market research firm Counterpoint.

The remaining 20% are made in India – but this amount may be set to grow as the company looks to avoid tariffs.

Image source, EPA

US and Chinese officials agreed to walk back from months of tariff escalation - at least for now - and start a new round of trade negotiations.

While US President Donald Trump hailed the deal as a "reset" in US-China relations - and US financial markets surged in response to the deescalated trade war - Chinese businesspeople have a less optimistic outlook about their future relationship with the world's biggest economy.

Here's what to know:

• Speaking at the White House, Trump says the US has achieved a "total reset" in relations with China after both countries agreed to reduce tariffs on each other's goods for 90 days
• Trump also says he doesn't expect the tariffs on Chinese imports to return to the 145% level after the pause
• Wall Street has reacted with optimism, with key indices surging Monday morning - the tech-heavy Nasdaq was up more than 3.3% at opening
• In Beijing, the mood is more sombre. Businesses tell the BBC they expect more tariffs in the future. After all, the latest tariff rate imposed by Washington is still high, as the BBC's Theo Leggett reports

• In numbers: The 90-day pause will come into effect from Wednesday, with the US reducing tariffs on China to 30%, down from 145%. China will reduce duties on US goods to 10%, down from 125%

Michael Race
Business reporter

While the truce between the US and China has been broadly welcomed, there’s still concerns how this trade war will hit global trade.

Uncertainty has been the buzz word over the past few months, with central banks, big businesses and investors all on tenterhooks over what each day could throw up on tariffs.

“Tariffs are changing so rapidly that any future escalation might cause firms to sit out trade awaiting some anticipated resolution or reduction in tariffs ahead,” says Michael Pearce, deputy chief US economist at Oxford Economics.

He adds that there’s a risk to larger swings in prices for consumers.

The sectors set to benefit the most, however, are US industries with heavy exposure to China, which Pearce says is mostly appliances, furniture, homeware, toys, as well as many electronics.

Liv McMahon
Technology reporter

Tech companies are going to be at least somewhat relieved today.

The industry largely relies on supply chains and cheap manufacturing, which means the tariff uncertainty has led some companies to think about price rises.

One example is thought to be in gaming - exemptions to reciprocal tariffs for smartphones, laptops and other electronics, announced by President Trump in April, didn’t seem to include video games or consoles.

Seemingly in response to this, Sony, Microsoft and Nintendo all made moves to raise some of their prices in different regions - which they generally attributed to market conditions.

Tech firms will still be trying to figure out ways to deal with costs incurred by tariffs, which reportedly includes Apple - the Wall Street Journal, external claims the firm is considering whether to raise prices for its new iPhones later this year.

On the whole, the outlook for the wider sector remains murky.

Theo Leggett
International business correspondent

The dollar was also up against other major currencies, including the yen, euro and pound sterling. Gold - often seen as a safe haven for investors during turbulent times - saw its price fall.

The price of gold has risen in recent weeks, and hit an all-time record of $3,500 (£2,652) in mid-April amid confusion about the Trump administration’s economic policies.

It has subsided in recent days, however - and today dropped to $3,215 (£2,436) in the wake of the tariffs announcement, before recovering slightly.

US stock markets have opened sharply up following the tariffs deal announced between Washington and Beijing this morning.

In early trading the Dow Jones index was up more than 2.5%, as was the S&P 500.

The technology-heavy Nasdaq was up more than 3.5%. There were big gains for Apple, Amazon and the AI firm Nvidia.

We're getting a little more now from Trump's comments to reporters in the White House.

Trump says he does not expect US tariffs on Chinese imports to return to 145% after the 90-day pause ends.

He says repeatedly that Beijing wants to make a deal "very badly" and avoid a return to the worst of the US-China trade war.

However, Trump says that US tariffs on goods imported from China could still return.

Natalie Sherman
New York business reporter

Bob Doll, chief executive of Crossmark Global Investment, has been speaking to Michelle Fleury on Opening Bell about the stock market, where shares in companies that bring in goods from China are, unsurprisingly, surging.

Shares in Target, for example, have jumped more than 5%, while Nike is up more than 8%.

Oil prices and the dollar have risen too.

Despite the optimism on Wall Street this morning, Doll says the announcement does not completely clear up economic risks.

Businesses and households have had their confidence shaken, and the rise in tariff rates remains significant. Even the reduced 30% tariff rate could drive exports from China to the US down by more than a third, according to Macquarie Bank.

“From Liberation Day to now, uncertainty levels have moved up a lot and getting through that is not going to be simple,” Doll says. “My guess is, it’s not going to be a straight line up.”

In addition to speaking on the tariff pause with China, Trump has been laying out his plans to reduce US drug prices and bring them in line with the rest of the world.

After explaining the vast differences in pharmaceutical prices that US patients pay compared to their counterparts in the UK, EU and other developed countries, he says "what we're doing is equalising".

He adds: "We're all going to pay the same, we're going to pay what Europe is going to pay."

Trump also claims the US is going to pay the lowest price in the world, so "we're no longer paying 10 times more than another country."

We can bring you a bit more now on Trump's initial comments at the White House. He describes the relationship between the US and China as "very good".

"We're not looking to hurt China," he says, adding that China was "being hurt very badly".

"They were closing up factories. They were having a lot of unrest, and they were very happy to be able to do something with us."

Trump goes on to say that his administration made a "great trade deal" with China, which was "a much bigger deal originally, and then they cancelled it right on the last day."

As a reminder, the US will still apply a 30% tariff on Chinese goods during the 90-day pause agreed to by the two countries. US goods face a 10% tariff in China.

• Our correspondent in Beijing, Laura Bicker, wrote earlier about the impact of US tariffs on China - read here

Trump says he's charging China a 20% tariff rate "for the fact that they send fentanyl" into the US.

"And they've agreed they're going to stop that," Trump says.

He adds that "they'll be rewarded by not having to pay ... hundreds of billions of dollars in tariffs."

China is the primary source of the precursor chemicals used to produce fentanyl, which killed over 74,000 Americans in 2023 after taking drug mixtures containing fentanyl, according to the US Centers for Disease Control (CDC), external.

• For a bit more context you can check out our explainer: How does fentanyl get into the US?

Trump says his administration has achieved a "total reset with China" with the latest agreement, after weeks of an escalating trade war.

"The best part of the deal", Trump adds, is that "China agreed to open itself up to American business".

Trump adds the US has "opened" itself to Chinese imports but that "they didn't open their country to us".

"It never made sense to me. It's not fair," Trump says.

He also says China will "suspend and remove all of its non-monetary [trade] barriers", but says that the deal still needs to be signed.

US President Donald Trump is now speaking at the White House.

Commenting on further negotiations related to the tariff agreement with China, Trump says he will speak to Chinese President Xi Jinping "maybe at the end of the week".

We'll bring you the key lines in our next few posts - you can also follow along by clicking Watch live at the top of the page.

Tariffs? What tariffs?published at 14:42 British Summer Time 12 May

14:42 BST 12 May

Natalie Sherman
New York business reporter

The stock market in the US is soaring this morning, a reflection of the outcome of US-China trade talks over the weekend, which yielded a much more significant drop in tariffs than many analysts had expected.

The S&P 500 is up roughly 2.6%, the Dow by about 2.5% and the Nasdaq by more than 3.3%.

The market had already recovered significant ground since 2 April, when Trump’s “Liberation Day” tariffs sparked turmoil.

In the US, the stock indexes are now trading at levels close to where they started the year.