Trade tensions between China and the United States have dominated both political and financial news throughout 2018. Strong rhetoric from both sides and the application of tit-for-tat tariffs have left investors uncertain while also having a negative impact on some major industries in the U.S.

With the midterm elections looming, the trade situation is a key political talking point again, and President Trump has said this week that there is progress being made.

President Trump Positive About Trade Deal Progress

President Trump took to Twitter on Thursday to reveal that he has been in talks with Chinese President Xi Jinping.

Trump told his followers that he had “Just had a long and very good conversation with President Xi Jinping of China. We talked about many subjects, with a heavy emphasis on Trade. Those discussions are moving along nicely with meetings being scheduled at the G-20 in Argentina. Also had good discussion on North Korea!”

This announcement was unexpected, and it could have had a small part in the confidence of Asian markets on Friday. All major Asian exchanges including Japan’s Nikkei, the Shanghai Composite, the Hong Kong Hang Seng, and South Korean Kospi were up on Friday morning.

Stock growth is mostly attributed to positive earnings reports by major companies in the region, but analysts have noted that Trump’s news would have also had a positive effect.

Why the Trade Situation Needs to be Resolved

The United States has a massive trade tensions and deficit with China, and the President sees this as a disadvantage for Americans. Low cost Chinese imports attract high demand, so the solution will not be simple. Still, most can agree that trade deals should be revisited to ensure that American businesses are able to compete.

President Trump has applied pressure to China throughout this year. While tariffs have hurt some local companies and stock prices, the eventual result will be much more important than any short-term losses. This administration sees the balancing of trade as key to its overall policy. A better trade agreement and concessions from China could eventually allow more American businesses to sell in Asia, or, it could lead to American businesses bringing their manufacturing operations back into the United States.

Regardless of opinions on how Trump approaches diplomatic relations, there is no question that his methods have been effective, at least up until this point. Investors, business owners, and American consumers should monitor the situation closely, as any developments regarding Chinese trade will impact almost everyone in the country on some level.