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China Cuts Interest Rates Amid Escalating Trade Tensions

The Chinese central bank has slashed interest rates as part of a broader stimulus package aimed at cushioning the economic blow from the ongoing trade war with the U.S.

This move comes just hours after both nations announced exploratory peace talks, with high-level delegations set to meet in Switzerland this weekend — marking the first direct negotiations in months.

What’s happening:

• The Trump administration has hiked tariffs on Chinese imports to 145%

• Beijing has retaliated with 125% levies

• Supply chains, pricing, and business confidence are all under pressure

China’s export-driven economy is feeling the squeeze, with factory orders slowing. Meanwhile, new data shows the U.S. economy contracted in Q1.

Leading the talks:

U.S. Treasury Secretary Scott Bessent and China’s Vice Premier He Lifeng

Trump has signaled a willingness to cut tariffs — but Beijing wants the U.S. to make the first move.

Traders take note:

Monetary moves and diplomatic signals are reshaping sentiment fast.