New China Tariffs on Hold After G20

New China Tariffs

The United States and China made progress towards resolving trade tensions during a meeting at the G20 summit over the weekend. The White House announced that both President Trump and President Xi Jinping of China will implement a new round of negotiations, and Trump agreed to hold his plans to place new China tariffs on up to $200 billion of Chinese goods at the beginning of next year.

Stock market futures jumped after the announcement, giving investors some confidence moving into this week and the end of the year.

Concessions That Led to an Ease in Trade Tensions

Although discussions are only taking place at a very high level at this stage, both leaders have already agreed to make some concessions that will bring China and the U.S. closer to a final renewed trade agreement.

Both nations will discuss technology transfer to share learnings from manufacturing contracts. There will also be discussions on intellectual-property protections, something that Trump has pushed hard for during his term so far. Protections from cyber-intrusions will also be discussed in future meetings.

The White House announced during the weekend that China has agreed to buy a substantial amount of industrial goods, agricultural products, and energy products from the U.S.

Chinese President Xi Jinping also agreed to reconsider a merger between NXP Semiconductors and Qualcomm Inc.

In addition to postponing new China tariff that Trump had already announced for January, the U.S. also agreed to avoid any new tariffs, as long as Chinese representatives continue to engage in meaningful negotiations with their American counterparts.

Wang Yi, the Chinese Minister of Foreign affairs, said that both countries were able to reach a “consensus” on issues that have plagued negotiations so far.

New China Tariffs are Up, U.S. Futures Look Positive

Asian stocks rallied during Monday trading. The Japanese Nikkei, Shanghai Composite, Singapore STI, and Hong Kong HSI all increased by at least 1.00% during Monday’s trading. The Shanghai Composite had the biggest gains, growing by 2.57% across the index.

Dow Jones Industrial Average futures are up 2.07% ahead of Monday trading, and the NASDAQ-100 futures are up 2.63%.

Trade tensions have significantly impacted the stock market this year. This is positive news not just for investors, but for the whole economy. A better trade relationship with China, and concessions that lead to more U.S. exports could help to drive growth in 2019 and beyond.

 

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The reports, research and newsletter are based on current and historical market data, as well as publicly available financial data.They are intended to be a starting point for investors. They do not provide every material fact about a company or industry, nor are they recommendations to buy or sell. The writers and the company make no warranties or representations as to the accuracy of these reports.   You should NOT rely solely upon the information or opinions read in the content. Rather, you should use the content as a starting point for doing independent research on the independent analysis and trading methods in the content. The content is impersonal and does not provide individualized advice or recommendations for any specific reader or individual portfolio. By accessing this website you have agreed to our disclaimers and privacy policy.

 

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