US Formally Cuts Fentanyl Tariff On China To 10% After Xi Deal

Summary:

US President Donald Trump formally cut a fentanyl-related tariff on imports from China to 10%, delivering on a key element of the sweeping trade deal struck with Chinese leader Xi Jinping.

The move, which lowers the levy from the current 20% rate, will be effective on Nov. 10, according to an executive order issued Tuesday.

"The PRC has committed to take significant measures to end the flow of fentanyl to the United States, including stopping the shipment of certain designated chemicals to North America and strictly controlling exports of certain other chemicals to all destinations in the world," Trump said in the order.

Trump imposed the fentanyl tariff to pressure Beijing to do more to crack down on trafficking of the deadly drug and the precursor chemicals used to make it, but agreed to lower the rate following an October summit with Xi in South Korea, citing progress with China's efforts.

Trump said the State Department and Department of Homeland Security would continue to monitor China's implementation of the agreement.

"Should the PRC fail to implement its commitments as described in section 1 of this order, I may modify this order as necessary," Trump said.

The reduced rate marks a significant concession to China and is part of a broader pact between Trump and Xi that will ease trade restrictions following months of spiraling tariff announcements and export curbs between the world's two largest economies.

That agreement — intended to last for one year — stabilized what was a turbulent relationship between Washington and Beijing that had them escalating threats in a bid for leverage ahead of the summit. The Trump-Xi deal, however, falls short of any enduring pact, setting the stage for further turbulence ahead of renegotiations in a year and potential disagreements over enforcement sooner.

In addition to reducing the fentanyl rate to 10%, the truce is also expected to extend the suspension, for one year, of a separate 24% levy. But the full tariff picture remains murky; several goods are excluded from the baseline levy and other products face preexisting tariffs.

The deal eases what had been a comparative disadvantage for China over some peers. Trump's tariff rate on China — long considered America's biggest trading foe and a major geopolitical rival — is now nearly the same as the levies applied on several Southeast Asian countries.

Trump, speaking to reporters shortly after the Xi meeting, said the Chinese leader pledged that "he was going to work very hard to stop the flow" of fentanyl. Trump has said he would cut all fentanyl-related tariffs if Beijing cracks down, signaling a possible concession in future talks.

Still, Treasury Secretary Scott Bessent has warned that the fentanyl-related tariff reduction may be reviewed sooner than the one-year timeframe of the overall deal.

"We're going to set up a very strict quantitative criteria and we'll revisit it in six or 12 months to see whether they've accomplished it. And my sense is the tariffs could go up or down," Bessent told Fox News Sunday on Nov. 2.

Trump said he expects to visit China in the first half of next year, and to host Xi in the US after that trip. Those meetings will serve as crucial markers for the status of the truce. The deal also rests under a cloud of legal uncertainty with the US Supreme Court weighing the constitutionality of Trump's use of emergency powers to enact country-by-country levies.

Source: Bloomberg Europe

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Olivia Brooks

Stocks

Economic

U.S. stock futures inched lower on Tuesday evening after Wall Street suffered broad losses, as top bank executives warned of a looming market correction and investors grappled with deepening uncertainty around Federal Reserve policy.

S&P 500 Futures inched 0.2% lower to 6,789.0 points, while Nasdaq 100 Futures fell 0.4% to 25,487.0 points by 19:28 ET (00:28 GMT). Dow Jones Futures edged up 0.1% to 47,252.0 points.

Bank CEOs stoke market bubble fears

In Tuesday's regular session, the S&P 500 slipped 1.2%, and the NASDAQ Composite dropped over 2%, while the Dow Jones Industrial Average fell 0.5%.

The slide came after Morgan Stanley (NYSE:MS) and Goldman Sachs (NYSE:GS) chiefs sounded alarm bells over overheated valuations and speculative trading in technology shares.

Morgan Stanley CEO Ted Pick said markets could face a drawdown of 10 %–15 %, adding that such a pullback would be a healthy normalization after months of exuberance driven by artificial-intelligence optimism.

Goldman Sachs CEO David Solomon echoed those concerns, warning that the surge in mega-cap tech stocks had created "bubble-like dynamics" that were unsustainable without stronger earnings support.

Their remarks stoked investor anxiety that Wall Street's rally, powered by the "Magnificent Seven" tech giants, may be approaching a breaking point. Several of those companies have seen market capitalizations soar to record highs this year, fueling fears of excessive concentration risk.

The warnings came as investors also faced growing uncertainty about the Fed's next policy steps. A prolonged government shutdown has left key economic data releases unavailable, depriving policymakers and traders of crucial signals about the state of the economy.

Fed officials on Monday added to the confusion. Some policymakers suggested that the central bank could consider another cut in December if inflation continues to cool, while others argued that strong job growth and resilient demand meant policy should stay restrictive for longer.

AMD slips despite profit beat; Pinterest tumbles 20%

In extended trading, several tech names slumped following quarterly results. Advanced Micro Devices (AMD) (NASDAQ:AMD) dropped over 3% despite topping profit estimates, as Amazon said that it dissolved its stake in the chipmaker.

Pinterest (NYSE:PINS) tumbled roughly 20% after its quarterly revenue guidance fell short of expectations, stoking worries about a slowdown in digital advertising.

Super Micro Computer (NASDAQ:SMCI) slid 9% after issuing bleak guidance, with analysts flagging near-term delivery delays in its AI server business.

Source: Investing

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Fiona Harper

Oil fell for a second day after an industry report indicated the biggest increase in US inventories in more than three months.

West Texas Intermediate held above $60, while Brent settled at more than $64 on Tuesday. US crude inventories rose 6.5 million barrels last week, according to a document from the American Petroleum Institute seen by Bloomberg. That would be the biggest jump since July 25 if confirmed by official data later Wednesday.

Oil declined Tuesday after a global equities rally hit a speed bump and the greenback climbed to the highest in more than five months, weighing on crude and other dollar-denominated commodities. WTI has fallen 16% this year as increased production from OPEC+ and non-member nations amplified concerns over a forming glut, although prices have rebounded somewhat after the US last month announced sanctions on Rosneft PJSC and Lukoil PJSC, Russia's two biggest producers.

Source: Bloomberg Europe

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Olivia Brooks

Political

Economic

US President Donald Trump said he met with representatives from Switzerland and announced additional trade talks, as the European nation seeks to reduce a tariff rate that ranks higher than any other developed nation.

"It was my Great Honor to just meet with high level Representatives of Switzerland," Trump said Tuesday in a social media post. "We discussed many subjects including, and most importantly, Trade and Trade Imbalance. The meeting was adjourned with the understanding that our Trade Representative, Jamieson Greer, will discuss the subjects further with Switzerland's Leaders."

Trump has imposed a 39% tariff on goods from Switzerland, threatening to drive up costs for chocolatiers including Lindt and watchmakers, including Swatch Group and Rolex SA. Pharmaceuticals accounted for almost half of Swiss exports to the US in 2024, according to data compiled by Bloomberg Economics.

The US earlier this year scrapped plans to impose tariffs on gold bars from Switzerland after the plan shocked global markets and threatened to disrupt supplies.

Switzerland has recently proposed moving some business from Swiss gold refiners to the US as part of a bid to broker a broader trade deal.

The presidential meeting comes as Helene Budliger Artieda, Switzerland's top trade diplomat, has made repeated trips to Washington in recent weeks as Bern attempts to negotiate a lower rate. The White House did not immediately respond to a request for comment on who Trump met with.

Swiss President Karin Keller-Sutter declined to give a timeline for negotiations when asked about the progress late last month.

"In the end the US president decides," she said. "So maybe it just needs some more patience."

Despite the tariff rate, indications are that demand for Swiss goods has, in some cases, withstood the impact of the tariffs. Foreign sales to the US excluding gold, adjusted for seasonal swings, were 43% higher in September than in August, the country's customs office said last month.

Still, Bern has cut its growth forecast for next year based on the expected impact of Trump's tariffs on the economy. Foreign sales of Swiss watches fell in September, driven by a 55% plunge in exports to the US.

Source: Bloomberg Europe

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Manuel

Stocks

Advanced Micro Devices (AMD) on Tuesday reported record quarterly results above analysts' projections as booming demand for AI helped boost sales of its data center chips.

AMD posted adjusted earnings per share of $1.20 on revenue that jumped 36% year-over-year to a record $9.25 billion in the third quarter, well above analysts' estimates compiled by Visible Alpha.

Sales in AMD's data center segment—by far its largest—rose 22% year-over-year to $4.3 billion, slightly above expectations. The results did not include any revenue from shipments of AMD's MI308 AI chip line to China, which AMD has said it would resume after ironing out a revenue-sharing agreement with the Trump administration.

CEO Lisa Su said the strong results mark "a clear step up in our growth trajectory as our expanding compute franchise and rapidly scaling data center AI business drive significant revenue and earnings growth."

Why This Is Significant

AMD has faced growing expectations heading into Tuesday's print to impress investors with strong revenue growth that would justify its stock gains this year amid worries about an AI bubble. The chipmaker's solid showing for the third quarter could help it defend its recent momentum.

For the current quarter, AMD said it sees revenue between $9.3 billion and $9.9 billion, above the analyst consensus of $9.17 billion. That range doesn't include any revenue from AMD MI308 shipments to China either, AMD said.

Shares of AMD slipped about 1% in extended trading following the release, after dropping close to 4% in Tuesday's session amid broader declines as worries about an AI bubble weighed on tech stocks. The chipmaker's stock has more than doubled in value this year.

Source: Investopedia

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Manuel

Political

Economic

Canada could scrap a cap on oil and gas emissions if other measures like effective carbon markets, stronger regulations, carbon capture and storage technologies proved successful, the government said in a budget plan unveiled on Tuesday.

The climate plan, disclosed as part of Prime Minister Mark Carney's first budget, said under those conditions, the cap “would no longer be required as it would have marginal value.”

Reuters reported last month that, Canada was in talks with energy companies and the oil-producing province of Alberta about eliminating the emissions cap from the country’s oil and gas sector if the industry and province reduce their carbon footprint in other ways.

Canada’s emissions cap was not enforced through legislation and not scheduled to take effect until 2030, but has been condemned by Canadian oil and gas companies that say it would result in lower production.

Carney, who has been focused on trying to steer Canada's economy through trade wars with the U.S. and China, has been criticized by some members of his own party for backing away from the Liberals' focus on the environment.

Carney’s budget also included steps to speed up investments in clean energy by offering further tax credits, updating clean fuel regulations and plans to modernize Canada’s electrical grids, which officials said would require investments “nearly triple from current levels to meet anticipated future demand.”

It said the government would propose amendments to greenwashing legislation that had created investment uncertainty. Passed during former Prime Minister Justin Trudeau's government last year, the legislation had been criticized by oil companies.

Ahead of the budget's release, Keith Stewart, a senior energy strategist at Greenpeace, said Carney should be doing more for the environment given his previous experience as a UN special envoy on climate.

“When you’re the prime minister, you can make the rules and say - ‘You’re not allowed to do these things, like keep developing fossil fuels,” he said. “There are things that governments can do that bankers can’t - and I don’t think he’s entirely made that shift.”

The budget called the transition to low-carbon energy and clean technology “an economic necessity” and a “moral obligation.”

Source: Reuters

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Manuel

Political

The government shutdown now stands at 35 days and is tied as the longest in US history as economic pain points continue to mount.

This past weekend was the worst yet at airports, and Transportation Secretary Sean Duffy warned Tuesday that another week of shutdown could even force the administration to close some of the national airspace in what he said could prompt "mass chaos."

Meanwhile the Supplemental Nutrition Assistance Program (SNAP), which is received by roughly one in eight Americans, will pay partial food aid benefits, according to a Trump administration court filing on Monday.

Trump added some confusion around that issue Tuesday when he posted on social media that benefits would "be given only when the Radical Left Democrats open up government." White House press secretary Karoline Leavitt claimed later in the day he wasn't referring to these immediate benefits, saying "we're getting that partial payment out the door."

Either way, these growing economic ripples appear to be having an effect on lawmakers: Senate Majority Leader John Thune suggested to reporters Tuesday that bipartisan talks may have the Senate "close to an off-ramp."

This new momentum comes ahead of a Senate recess scheduled to start at the end of the week. The outlines of a possible deal are coming into focus, which could reopen the government — but perhaps only for a matter of weeks. Government Shutdown: Stoppage Tied for Longest Ever as Trump's Team Warns of 'Mass Chaos' at Airports_1

Government Shutdown: Stoppage Tied for Longest Ever as Trump's Team Warns of 'Mass Chaos' at Airports_1

Overall, flight interruptions have now impacted over 3 million passengers, an airline group says, and the delays continued over the weekend with new stoppages seen Monday in Southern California.

Saturday was also the beginning of an open enrollment period for healthcare programs run by Affordable Care Act exchanges. Premium increases there — with Democrats looking to extend enhanced government subsidies for those plans — are at the heart of the impasse as some premiums are set to double next year.

Republicans have said they will promise a healthcare vote on a specified date in the coming weeks in return for reopening the government now.

It remains to to be seen if that concession unlocks enough Democratic votes after the party has said for weeks that these two votes need to happen at the same time.