Stocks surge on optimism about US-China trade talks

Cheryl Sanders
October 12, 2019

Stocks fell off their session highs shortly before the close after U.S. Trade Representative Robert Lighthizer said a decision had not been made over additional U.S. tariffs scheduled for December.

As part of the initial deal, Beijing has agreed to limited measures that could see better ties between the two countries while the United States will suspending a tariff hike that was due to take effect on Tuesday.

The president said the highest amount of agricultural products Beijing ever purchased from the U.S.in a year was $16 billion.

"The Chinese side has come with great sincerity and is willing to make serious exchanges with the US on issues of common concern such as trade balance, market access and investor protection, and promote positive progress in the consultations", Liu said.

"We have an agreement around transparency into the foreign exchange markets and free markets", Treasury Secretary Steven Mnuchin said.

Trump had said previously he would not be satisfied with a partial deal to resolve his effort to change China's trade, intellectual property and industrial policy practices, which he argues cost millions of U.S.jobs.


"I don't think it should be a problem getting it papered", Mr. Trump said. President Trump said he expects a deal to be written and implemented in a matter of weeks, calling it a "fast and clean" process.

In a Friday letter sent to US President Donald Trump, Chinese President Xi Jinping asked that the two nations "work together to manage differences on the basis of mutual respect".

Earlier in the day, tweeted on Friday that good things were happening during the talks with "warmer feelings than in recent past".

President Donald Trump said Washington will suspend a tariff hike planned for Tuesday on $250 billion of Chinese goods.

U.S. stocks ended more than 1 percent higher on Friday but well off the day's highs after the announcement, with the S&P 500 up 1.09 percent after rising as much as 1.7 percent earlier on hopes of a deal.

"It's beyond a trade deal", Trump said.


"We have made substantial progress in many fields, and we are very happy about it", Liu said.

Hirson said the two sides ultimately may not get through to phase two. The two countries have been engaged in an ongoing trade war for 15 months, slapping retaliatory tariffs on each other's products.

On Friday, regulators announced a timetable for an initiative announced in 2017 to abolish limits on foreign ownership of some financial businesses. Tensions between the USA and China escalated ahead of the discussions, with the US adding 28 entities to a blacklist.

Similarly, American Apparel and Footwear Association president and CEO Rick Helfenbein said the organization "welcomes the president's decision" but added that "the reality is that everything now being hit with punitive tariffs is still being charged".

The interim agreement also does not resolve some of the thorniest issues between the two countries, including whether the United States will continue to label China a currency manipulator and whether it will keep Huawei, the Chinese telecom giant, on a government blacklist.


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