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Trump brags about China trade deal, Wall Street surges

IANS  |  Washington 

US on Monday hailed the temporary trade truce he reached with on the weekend as a "big leap forward" as Wall Street jumped upwards on the news.

"My meeting in with of was an extraordinary one. Relations with have taken a BIG leap forward! Very good things will happen. We are dealing from great strength, but China likewise has much to gain if and when a deal is completed. Level the field!" said on his account on Monday morning.

met on the weekend with at the Summit in Argentina, a highly anticipated meeting at which the two leaders agreed not to impose additional tariffs on each other's goods for at least 90 days, reported.

The meeting had been considered a key opportunity to reduce trade tensions between the two countries after they began a trade war last July, a situation that as it has ratcheted upwards in recent months has roiled international markets.

At the meeting, the US and China agreed to "immediately" begin negotiations on structural changes in the Chinese economy, among other issues, the said.

Both nations will make an effort to complete the talks "in the next 90 days," and during that time Trump agreed to leave the tariff rate on some $200 billion in Chinese products at 10 per cent and not raise that level to 25 percent on January 1 as he had previously threatened to do.

Louis Kujis, an for with the consulting firm, said that it is probable that the truce was due mainly to a change in mindset, possibly temporary, in the US.

"Room for agreement on much of the substance (is) rather narrow, it is fragile. Nonetheless, the postponement of tariff hikes and the resumption of dialogue and negotiations are a positive, for the economy and asset markets alike," said Kujis in a communique.

As had been expected, investors reacted positively to the news of the trade truce and Wall Street opened the trading day on Monday with strong gains, with the Dow Jones Industrial Average up some 1.23 percent, although those gains had tapered off somewhat by midday.

So far, the US has imposed significant tariffs on Chinese products valued at some $250 billion since July and Trump had threatened to levy higher tariffs on another $267 billion worth of Chinese goods.

China exported products worth some $506 billion to the US in 2017.

Meanwhile, had retaliated by placing reciprocal tariffs on more than $60 billion worth of US imports, almost half of the $130 billion in goods and mainly it bought from the US last year.

Despite the enthusiasm expressed by Trump over the deal, the on Monday reacted with caution to the trade truce and provided no further details about the agreement.



(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, December 04 2018. 03:10 IST