Asian stock markets surged on Wednesday after the United States and China reached a preliminary agreement aimed at de-escalating trade tensions, fueling optimism for a broader resolution in the protracted tariff war between the world’s two largest economies.
Following two days of high-stakes negotiations in London, both sides announced they had agreed to a framework deal, building on earlier discussions held in Geneva where reciprocal tariffs were slashed. The move is seen as a crucial step toward a comprehensive pact.
“There is up to 12 million tons of additional (LNG) capacity that we’re adding between now and the end of the decade,” said Cederic Cremers, Shell’s president of integrated gas, during the Wood Mackenzie LNG conference in London. “That is not an ambition. Those are all projects that are currently under construction.”
Among the most pressing topics during the talks were China’s exports of rare earth minerals key materials used in electronics and electric vehicle batteries—and Beijing’s desire for reduced restrictions on access to advanced tech products.
US Commerce Secretary Howard Lutnick struck an optimistic tone, suggesting that issues surrounding rare earths were on track to be resolved. However, the framework agreement still requires the formal approval of both President Donald Trump and President Xi Jinping.
“We’re moving as quickly as we can,” said US Trade Representative Jamieson Greer. “We would very much like to find an agreement that makes sense for both countries.”
On the Chinese side, International Trade Representative Li Chenggang expressed hope that the progress made in London would “help build trust” and pave the way for more meaningful engagement.
Markets React Positively — But With Caution
The news sent a wave of optimism through Asian markets.
- Hong Kong’s Hang Seng Index rose 0.7% to 24,327.51
- Shanghai Composite added 0.6% to 3,403.56
- Tokyo’s Nikkei 225 gained 0.5% to 38,385.37
- Other markets in Sydney, Seoul, Wellington, Taipei, and Manila also posted gains.
Global Growth Concerns Linger
Tuesday’s agreement overshadowed a more sobering update from the World Bank, which slashed its 2025 global growth forecast to 2.3%, down from 2.7% projected in January. The Bank cited prolonged trade tensions and policy uncertainty as key factors.
The US economy is now projected to grow at 1.4% in 2025, half the pace of its 2024 expansion, according to the report.
Key Market Figures (As of 0230 GMT)
- Nikkei 225 (Tokyo): +0.5% at 38,385.37
- Hang Seng Index (Hong Kong): +0.7% at 24,327.51
- Shanghai Composite: +0.6% at 3,403.56
- Euro/Dollar: $1.1413, down from $1.1426
- Pound/Dollar: $1.3481, down from $1.3501
- Dollar/Yen: 145.03 yen, up from 144.88 yen
- Euro/Pound: 84.66 pence, up from 84.61 pence
- WTI Crude: -0.2% at $64.86/barrel
- Brent Crude: -0.2% at $66.72/barrel
- Dow Jones (NY): +0.3% at 42,866.87
- FTSE 100 (London): +0.2% at 8,853.08
