Xi Deal to Revive Trade Talks Encourages Investors

Yolanda Curtis
July 2, 2019

'Very big deal, probably, I guess you'd say the largest deal ever made of any kind, not only trade'. Initially, reports from the G20 summit confirmed that Trump had said "US companies can sell their equipment to Huawei".

'CFO [chief financial officers]'s can not make decisions with a purgatory of uncertainty, endlessly hanging over the market, ' said McDonald. The US president also vowed, for the "time being", to hold off on his plan to impose tariffs on some $300 worth of billion Chinese imports.

A trade truce between the US and China sent the S&P 500 (^GSPC) to a record high Monday, but as investors rejoiced, one Democratic presidential candidate questioned President Donald Trump's long-term plan.

But Trump said on Saturday he did not think that was fair to US suppliers.

The president has repeatedly insisted that China bears the cost of the tariffs he's imposed on its exports to the USA, rejecting the consensus of economists that the taxes are paid by American companies and consumers in the form of higher prices.

USA officials believe China exploits the telecommunications equipment produced by China's Huawei, the world's second-largest maker of smartphones, for espionage, something the company rejects.

Trump offered no further visibility into his agreement with Xi during both a scheduled meeting on Sunday with South Korean President Moon Jae-in and a surprise summit with North Korean leader Kim Jong Un at the Demilitarized Zone dividing the Korean Peninsula.

"Some Fed officials curbed easing views recently and the data will help the market get a clearer picture of whether the Fed stands poised to cut rates this month", said Koji Fukaya, director at FPG Securities.

Still, financial markets, which have suffered from the almost year-long trade war, are likely to cheer the truce, it added.

The U.S. government is now backtracking slightly in the Huawei ban. "Businesses don't like uncertainty, and this prolongs the uncertainty", said deLisle.

China's position as the trade war has progressed has become increasingly strident, saying it would not be bullied, would not give in to pressure, and that it would 'fight to the end'.

Taoran Notes, an influential WeChat account run by China's Economic Daily, said the United States was now aware that China was not going to give in, and that tariffs on Chinese goods were increasingly unpopular back home.

"We are where we are", he said at a news conference with Moon when asked about China.

Other reports by iNewsToday