The U.S. and China agreed to ease tariffs following weekend trade talks, triggering sharp swings in global commodity markets on Monday. Brent crude futures surged 3.9% intraday in London, copper prices rose 1.4%, while European natural gas, soybeans, and iron ore also rallied. Shares of global mining giants climbed, though gold prices retreated as risk appetite improved.
Under the temporary 90-day deal, China will cut tariffs on U.S. goods from 125% to 10%, while the U.S. will reduce tariffs on Chinese imports from 145% to 30%. U.S. Treasury Secretary Bessant stated both nations oppose economic “decoupling” and pledged ongoing dialogue to advance negotiations. The talks, led by Chinese Vice Premier He Lifeng and U.S. Trade Representative Jamison Greer, took place in Geneva.
Saxo Bank’s Ole Hansen noted that tariff reductions eased fears of prolonged economic disruption but cautioned that sustained optimism remains uncertain given Washington’s hardened stance. Since the U.S. first announced tariffs in April, commodities have seesawed, with oil prices still down over 10% year-to-date amid OPEC+ supply increases.
Mining stocks soared in London, with Glencore and Rio Tinto gaining over 5%, driving European equity gains. Copper rebounded from tariff-driven lows, Chicago soybeans hit late-February highs, and cotton futures jumped 3.4%. China’s tariff adjustments may revive agricultural trade flows, critical for the world’s top soybean importer.
Meanwhile, gold faced dual headwinds: easing U.S.-China tensions and a ceasefire between India and Pakistan after four days of clashes dampened safe-haven demand. ING’s Ewa Manthey highlighted that de-escalating trade and geopolitical risks have curbed gold’s appeal, boosting broader market confidence.
