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US and China agree to slash tariffs for 90 days

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Nick Edser & Jonathan Josephs

Business reporters, BBC News

Watch the moment Scott Bessent announces the tariff reduction

The US and China have agreed a deal that will significantly cut the import tariffs they have imposed on each other, in a major de-escalation of their trade war.

US Treasury Secretary Scott Bessent said both countries would lower their reciprocal tariffs by 115% for 90 days.

The announcement came after the two countries held talks in Switzerland, the first between the two countries since US President Donald Trump had levied steep tariffs on Chinese imports last month.

Shares jumped on news of the deal. Last month, the imposition of the tariffs had caused turmoil in financial markets and sparked fears of a global recession.

The trade war between China and the US intensified last month after President Trump announced a universal baseline tariff on all imports to the US, on what he called “Liberation Day”.

Around 60 trading partners, which the White House described as the “worst offenders”, were subjected to higher rates than others, and this included China.

China retaliated with tariffs of its own, and this ratcheting up of levies ultimately led to the US imposing a 145% tariff on Chinese imports, while Beijing had a 125% levy on some US goods.

Under the new agreement, the US and China have both suspended all but 10% of their Liberation Day tariffs for 90 days and cancelled other retaliatory tariffs.

This will cut US tariffs on Chinese imports to 30%, while Chinese tariffs on US imports will be cut to 10%. The pause will begin on 14 May.

The US measures still include an extra 20% component aimed at putting pressure on Beijing to do more to curb the illegal trade in fentanyl, a powerful opioid drug.

The huge tariffs imposed had raised the prospect of trade between the two countries slumping, with US ports reporting a sharp drop in the number of ships scheduled to arrive from China.

Meanwhile Beijing has become increasingly concerned about the impact the tariffs could have on its economy. Factory output has already slowed and there are reports some firms were having to lay off workers as production lines of goods bound for the US began to grind to a halt.

Announcing the agreement, Bessent said: “The consensus from both delegations this weekend is neither side wants a decoupling.

“What had occurred with these very high tariffs was the equivalent of an embargo, and neither side wants that.

“We do want trade, we want more balanced trade, and I think that both sides are committed to achieving that.”

China’s commerce ministry said the agreement reached with the US was an important step to “resolve differences” and “lay the foundation to bridge differences and deepen co-operation”.

Neil Shearing, group chief economist at Capital Economics, said the agreement represented a “significant de-escalation” of the trade war.

“We’ve come from a place where tariffs imposed… were so high as to almost preclude trade in the long run between the world’s two largest economies,” he told the BBC.

However, he added, while trade will now continue, “it will happen at a higher price and that higher price will be borne by US consumers and US businesses”.

News of the agreement boosted stock markets, with Hong Kong’s benchmark Hang Seng Index ending the day up 3%. China’s Shanghai Composite Index had closed before details of the deal came out, and ended 0.8% higher.

European stocks rose and early indications were that the main US stock markets will open up by 2-3%.

The deal has boosted shares in shipping companies, with Denmark’s Maersk up more than 12% and Germany’s Hapag-Lloyd jumping 14%.

Maersk told the BBC the US-China agreement was “a step in the right direction”.

“We hope it can lay the foundation for the parties to also reach a permanent deal that can create the long-term predictability our customers need.”

However, the gold price – which has benefited from its safe-haven status in recent weeks given the disruption caused by the tariffs – fell 3% to $3,224.34 an ounce.

Getty Images  A worker at a furniture maker in Binzhou city in east China's Shandong provinceGetty Images

In a joint statement, both countries said they would establish “a mechanism to continue discussions about economic and trade relations”, led by Scott Bessent and China’s Vice Premier He Lifeng.

It added that both countries believe that “continued discussions have the potential to address the concerns of each side in their economic and trade relationship”.

President Trump has long been unhappy with the fact that the US buys substantially more goods from China than it sells it.

Other concerns include a lack of protection for the intellectual property rights of American companies in China including the forced transfer of technology.

There’s also unhappiness about alleged Chinese government subsidies that give their companies an unfair advantage – something Beijing says Washington also does.

When President Trump first announced the tariffs, he argued they would boost American manufacturing and protect jobs.

But many economists argued they would hit growth in the global economy, and make many products more expensive for US consumers.

Last month, the International Monetary Fund cut its growth forecast for the global economy for this year to 2.8% from 3.3%, arguing that the uncertainty caused by the tariffs would hit supply chains and lead to firm’s either pausing or cutting investment.

The UK and US reached a deal last week over tariffs on some goods traded between the countries.

The blanket 10% tariffs on imports entering the US from countries around the world still applies to most UK goods, but the deal reduced or removed tariffs on some UK exports, including cars, steel and aluminium.

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BBC threatens AI firm with legal action over unauthorised content use

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Liv McMahon

Technology reporter

Getty Images A silhoutted figure is shown holding their smartphone and looking at it in front of a white background displaying the Perplexity logo.Getty Images

The BBC is threatening to take legal action against an artificial intelligence (AI) firm whose chatbot the corporation says is reproducing BBC content “verbatim” without its permission.

The BBC has written to Perplexity, which is based in the US, demanding it immediately stops using BBC content, deletes any it holds, and proposes financial compensation for the material it has already used.

It is the first time that the BBC – one of the world’s largest news organisations – has taken such action against an AI company.

Perplexity has been approached for comment.

The BBC’s legal threat has been made in a letter to Perplexity’s boss Aravind Srinivas.

“This constitutes copyright infringement in the UK and breach of the BBC’s terms of use,” the letter says.

The BBC also cited its research published earlier this year that found four popular AI chatbots – including Perplexity AI – were inaccurately summarising news stories, including some BBC content.

Pointing to findings of significant issues with representation of BBC content in some Perplexity AI responses analysed, it said such output fell short of BBC Editorial Guidelines around the provision of impartial and accurate news.

“It is therefore highly damaging to the BBC, injuring the BBC’s reputation with audiences – including UK licence fee payers who fund the BBC – and undermining their trust in the BBC,” it added.

Web scraping scrutiny

Chatbots and image generators that can generate content response to simple text or voice prompts in seconds have swelled in popularity since OpenAI launched ChatGPT in late 2022.

But their rapid growth and improving capabilities has prompted questions about their use of existing material without permission.

Much of the material used to develop generative AI models has been pulled from a massive range of web sources using bots and crawlers, which automatically extract site data.

The rise in this activity, known as web scraping, recently prompted British media publishers to join calls by creatives for the UK government to uphold protections around copyrighted content.

Many organisations, including the BBC, use a file called “robots.txt” in their website code to try to block bots and automated tools from extracting data en masse for AI.

It instructs bots and web crawlers to not access certain pages and material, where present.

But compliance with the directive remains voluntary and, according to some reports, bots do not always respect it.

The BBC said in its letter that while it disallowed two of Perplexity’s crawlers, the company “is clearly not respecting robots.txt”.

Mr Srinivas denied accusations that its crawlers ignored robots.txt instructions in an interview with Fast Company last June.

Perplexity also says that because it does not build foundation models, it does not use website content for AI model pre-training.

‘Answer engine’

The company’s AI chatbot has become a popular destination for people looking for answers to common or complex questions, describing itself as an “answer engine”.

It says on its website that it does this by “searching the web, identifying trusted sources and synthesising information into clear, up-to-date responses”.

It also advises users to double check responses for accuracy – a common caveat accompanying AI chatbots, which can be known to state false information in a matter of fact, convincing way.

In January Apple suspended an AI feature that generated false headlines for BBC News app notifications when summarising groups of them for iPhones users, following BBC complaints.

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What next for gas and electricity bills and can I fix?

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BBC Treated picture of a hand on a radiator control.BBC

Gas and electricity bills will fall on 1 July, when the new energy price cap takes effect.

The drop will more than reverse the increase which millions of households faced on 1 April when the current cap began.

The energy price cap sets the maximum amount customers can be charged for each unit of energy, but actual bills depend on how much gas and electricity you use.

What is the energy price cap and how is it changing?

The energy price cap covers around 21 million households in England, Wales and Scotland and is set every three months by Ofgem.

It fixes the maximum price that can be charged for each unit of energy on a standard – or default – variable tariff for a typical dual-fuel household which pays by direct debit.

Between 1 April and 30 June 2025, gas prices are capped at 6.99p per kilowatt hour (kWh), and electricity at 27.03p per kWh.

This means the annual bill for a dual-fuel direct debit household using a typical amount of energy is £1,849 per year, an increase of £111 from the previous cap.

However, from 1 July, this annual bill falls £129 to £1,720.

Between 1 July and 30 September 2025, gas prices will be capped at 6.33p per kilowatt hour (kWh) and electricity at 25.73p per kWh.

Those who pay their bills every three months by cash or cheque pay more, but those on prepayment meters pay a little less.

The cap does not apply in Northern Ireland, which has its own energy market.

What is a typical household?

Your energy bill depends on the overall amount of gas and electricity you use, and how you pay for it.

The type of property you live in, how energy efficient it is, how many people live there and the weather all make a difference.

Graphic showing how the energy usage of different sized households determines typical bills, with a low-use flat or one bedroom house using 7,500 kWh of gas and 1,800 kWh of electricity paying £1,234, a medium-use two or three-bedroom house using 11,500 kWh of gas and 2,700 kWh of electricity paying £1,720, and a high-use four or more bedroom house using 17,000 kWh of gas and 4,100 kWh of electricity paying £2,427. Calculations are based on the April 2025 price cap figures.

The Ofgem cap is based on a “typical household” using 11,500 kWh of gas and 2,700 kWh of electricity a year with a single bill for gas and electricity, settled by direct debit.

The vast majority of people pay their bill this way to help spread payments across the year. Those who pay every three months by cash or cheque are charged more.

Should I take a meter reading when the energy cap changes?

Submitting a meter reading when the cap changes means you will not be charged for estimated usage at the wrong rate.

This is especially important when prices go up.

Customers with working smart meters do not need to submit a reading as their bill is calculated automatically.

What is happening to prepayment customers?

About four million households had prepayment meters in January 2025, according to Ofgem.

Between April and June, households on prepayment meters paid slightly less than those on direct debit, with a typical bill of £1,803, a rise of £113 from the previous quarter.

From 1 July, households on pre-payment meters will still pay slightly less than those on direct debit, with a typical annual bill of £1,672.

Getty Images Hand on a key being inserted into a prepayment meter with a display showing £7.87 left in credit.Getty Images

Many pre-payment meters have been in place for years, but some were installed more recently after customers struggled to pay higher bills.

Rules introduced in November 2023 mean suppliers must give customers more opportunity to clear their debts before switching them to a meter. They cannot be installed at all in certain households.

Households who pay their bills by cash or cheque will pay more than pre-payment or direct debit customers, with a typical annual bill of £1,855

Can I fix my energy prices?

Fixed-price deals are not affected by the energy price cap, which changes every three months and can rise and fall.

They offer certainty for a set period – often a year, or longer – but if energy prices drop when you are on the deal, you could be stuck at a higher price. You may also have to pay a penalty to leave a fixed deal early.

Ofgem, the energy regulator, says customers who want the security of knowing what their bill will be should consider moving to a fixed deal. However, it says they should make sure they understand all the costs.

Martin Lewis, founder of Money Saving Expert, recommends checking whole-of-market energy price comparison sites to help find the best deal.

What are standing charges and how are they changing?

Standing charges are a fixed daily fee to cover the costs of connecting to gas and electricity supplies. They vary slightly by region.

On 1 April, the average electricity standing charge fell from 60.97p to 53.8p but the average gas standing charge increased from 31.65p to 32.67p

Some customers in London and the North Wales and Mersey region saw larger increases.

From 1 July, standing charges will typically fall to 51.37p a day for electricity and 29.82p a day for gas.

Campaigners argue standing charges are unfair because they make up a bigger proportion of the bill of low energy users.

In response, Ofgem has said that energy firms must provide a choice of price-capped tariffs from winter 2025.

One would have a standing charge and unit rate – as is the case now – and another no standing charge but a higher unit rate. However, the proposals have been criticised as being too complicated.

What help can I get with energy bills?

The Household Support Fund, which was introduced in September 2021 to help vulnerable customers, has been extended until March 2026.

The Warm Home Discount scheme is being overhauled. From winter 2025, anyone on means-tested benefits will automatically see £150 taken off their bills, no matter what size of property they live in.

The government’s Fuel Direct Scheme can help people to repay an energy debt directly from their benefit payments.

In addition, suppliers must offer customers affordable payment plans or repayment holidays if they are struggling with bills.

Most suppliers also offer hardship grants.

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HS2 line to be delayed again with no new date given

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Nick Marsh

Transport correspondent

Michael Race

Business reporter

PA Media An HS2 worker stands in front of tunnel boring machine Karen at the Old Oak Common station box site during preparations for completing the 4.5 mile HS2 tunnelling to London Euston. Picture date: Monday December 2, 2024.PA Media

The opening of HS2 will be delayed beyond the target date of 2033, the government has confirmed, but it did not say when the high speed railway line will begin operating.

Transport Secretary Heidi Alexander said on Wednesday that there was “no route” to delivering the line on schedule and within budget, describing the HS2 project as an “appalling mess”.

She said a “litany of failure” had led to missed deadlines and ballooning costs which rose by £37bn between HS2 being approved in 2012 and last year.

It is the latest setback for the high-speed rail project, which has been scaled back and delayed repeatedly.

Getty Images Rail Minister Lord Peter Hendy speaks to HS2 high-speed railway project workers on 9 May 2025 in Birmingham, England. Getty Images

Rail Minister Lord Peter Hendy spoke with HS2 high-speed railway project workers in Birmingham in May.

Announcing the delay in the House of Commons, Alexander said: “It gives me no pleasure to deliver news like this.

“Billions of pounds of taxpayers’ money has been wasted by constant scope changes, ineffective contracts and bad management.”

She said she would provide an update on costs and deadlines before the end of the year.

Numerous Conservative governments presided over the rising cost of HS2.

Shadow transport secretary Gareth Bacon admitted that “mistakes were made in the delivery of HS2”.

He said that “costs more than doubled” and “the project has been repeatedly delayed”.

Bacon said that changes announced in 2023 under the then prime minister Rishi Sunak were the result of failures by the Conservative government with the scheme.

They included scraping the plan to build the HS2 line between Birmingham and Manchester.

Alexander said that two reports into the project are intended to “draw a line in the sand” and mark a reset in how major infrastructure in the UK is delivered.

An interim report by Mark Wild, chief executive of HS2 who was appointed last year, “lays bare the shocking mismanagement of the project under previous governments,” said Alexander.

She added: “Based on his advice, I see no route by which trains can be running by 2033 as planned.”

A second report by senior infrastructure delivery specialist James Stewart looked into the governance and accountability of HS2 Ltd. It set out what has gone wrong with project and what ministers can learn for future major projects.

Alexander also confirmed the appointment of Mike Brown, the former commissioner of Transport for London, as the new chair of HS2.

HS2’s troubled journey

Under the original plans, HS2 was intended to create high-speed rail links between London and major cities in the Midlands and North of England.

It was designed to cut journey times and expand capacity on the railways, but has faced myriad challenges and soaring costs in the 16 years since it was first proposed.

The massive construction project was given the green light in 2012, and was expected to cost £33bn and to be open by 2026.

Graphic showing HS2 rail line and cancelled sections

By 2013, the cost of the project had spiralled to almost £50bn, with the expected completion date pushed back to 2033.

In 2020, when Boris Johnson recommitted the government to going ahead with HS2, one independent estimate put the potential eventual cost at £106bn.

In recent years, the scope of the development has been scaled back.

The eastern leg between Birmingham and Leeds was axed first, before Rishi Sunak’s government cancelled the planned Birmingham to Manchester route.

Last year, the Department for Transport said the remaining project cost was estimated at between £45bn and £54bn in 2019 prices – but HS2 management has estimated it could be as high as £57bn.

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