May 12, 2025
United States:
US, China to Slash Tariffs During 90-Day Reprieve for Talks
The US and China will temporarily lower tariffs on each other’s products in a dramatic ratcheting down of trade tensions that buys the world’s two largest economies three months to work toward a broader agreement.
The combined 145% US levies on most Chinese imports will be reduced to 30% including the rate tied to fentanyl by May 14, while the 125% Chinese duties on US goods will drop to 10%, according to a joint statement and from officials in a briefing Monday in Geneva.
Europe:
ECB to Cut by More as Inflation Undershoots 2%, Poll Shows
The European Central Bank will lower borrowing costs more than previously expected this year to below 2% as inflation is seen undershooting the institution’s target in early 2026, according to economists surveyed by Bloomberg.
After seven quarter-point reductions so far, additional cuts are likely in June and September, a monthly poll showed. That would bring the deposit rate to 1.75% from currently 2.25%.
Asia:
Japan’s 30-Year Bond Yield Climbs to Highest in Almost 25 Years
Japan’s 30-year government bond yield climbed to its highest level in almost 25 years as investors continue to shun the nation’s super-long bonds.
The five basis points jump on Monday to 2.955% puts the 30-year maturity within reach of an all time high and underscores the turmoil that’s rocked the debt market since US President Donald Trump upped the ante with tariffs in early April.
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