#WATCH | US-China trade deal finalized; tariffs cut to 55% — What does it mean for Indian markets? Shaun Rein breaks it down@shaunrein @SnehiShah11 @AyeshaFaridi1 @SrishtiSharma_ https://t.co/eoFOjDwFeX
— ET NOW (@ETNOWlive) June 12, 2025
European stocks closed lower on June 11, while the UK’s FTSE 100 bucked the trend by notching a record high. This comes amid unfolding details of a trade agreement between the U.S. and China. The pan-European Stoxx 600 index finished the day 0.19% lower.
However, the UK’s FTSE 100 rose by 0.13% to close at an all-time high of 8,864.35 points. London’s gains were driven by a surge in housebuilder shares, which climbed 6% for the second consecutive day.
US-China trade talks: Donald Trump announces deal 'done' with China https://t.co/SqOsrc77Wz
— ET NOW (@ETNOWlive) June 12, 2025
This boost follows news of a £39 billion ($52.9 billion) investment in social and affordable housing in the UK and raised expectations for lower interest rates due to looser labor market data.
Internationally, attention remained on U.S.-China trade talks held in London. While representatives from both countries met on Tuesday, details were scarce by Wednesday.
SANCHEZ: The press release on this China 'deal' looks more like a framework. Will you commit to giving us the specifics?
BESSENT: I flew back at 4am to be here
SANCHEZ: It's a simple yes or no question
BESSENT: We're are in the midst of constructing it. It will be a longer… pic.twitter.com/f00SErLfks
— Aaron Rupar (@atrupar) June 11, 2025
U.S. Commerce Secretary Howard Lutnick stated that U.S. tariffs on Chinese imports would remain at 55%, while China would maintain a 10% tariff on U.S. goods.
A critical component of the deal involves Chinese exports of rare earth minerals to the U.S.
The U.S. inflation data released that day showed the consumer price index (CPI) rose by 0.1% month-on-month and 2.4% annually in May, slightly cooler than economists’ forecasts. U.S. President Donald Trump announced on Truth Social that China would supply rare earth elements to the U.S. upfront as part of the trade agreement. He characterized the relationship between the two nations as “excellent” and noted the agreement still required final approval from both leaders.
British assets remained stable post the UK government’s latest budget review, with the British pound trading at $1.35 against the U.S. dollar.
Trade talks impact European markets
Government bonds and equities saw minimal changes.
Joe Kaeser, chairman of the supervisory board at a major German energy company, expressed doubts over the European Union’s political readiness to strike a trade deal with the U.S. He noted that the EU might need restructuring to prepare for such negotiations. This statement comes as European and U.S. officials continue to work towards an agreement, especially after U.S. President Trump softened his stance on imposing a 50% tariff on EU imports. The U.S. Court of Appeals for the Federal Circuit in Washington, D.C., ruled in favor of the U.S. continuing its use of tariffs during a review of a lower court decision.
President Trump celebrated the ruling, highlighting its importance for protecting U.S. interests. Shares of companies involved in quantum computing saw an increase after Nvidia CEO Jensen Huang spoke optimistically about the sector’s future. He suggested quantum computing could start addressing real-world problems in the coming years.
European defense stocks recovered from a sell-off earlier in the week. The Stoxx Europe Aerospace and Defense index rose by 0.4%, driven by renewed investor optimism following the progress in U.S.-China trade talks. The agreement reportedly includes crucial terms related to the export of rare earth minerals from China, essential for defense technology manufacturing.
European markets ended the day with mixed outcomes, heavily influenced by international trade negotiations and economic data releases. The anticipated U.S.-China trade deal and UK economic indicators played significant roles in market movements. Further updates are expected in the following days as more details emerge.