Trump's U.S.-China trade tweet lifts markets
President Donald Trump said the U.S. and China are very close to signing a “big” trade deal, sending stocks to new records on expectations that a tariff increase planned for Sunday will be called off while talks progress.
“They want it, and so do we!” he tweeted five minutes after stocks opened in New York.
Investors cheered Trump’s statement that the U.S. wants a deal with Beijing soon. That contrasted with remarks he made last week that he liked the idea of waiting until after the 2020 elections in the U.S. to sign a deal. The S&P 500 Index advanced to an intraday high and the MSCI All-Country stock index to its first record since January 2018.
Trump’s trade advisers are expected to lay out the options including a delay in the Dec. 15 tariffs at a White House meeting later Thursday, people familiar with the matter said. While that gathering may highlight continuing divisions among them over whether to hit Beijing with a new wave of tariffs, Trump’s tweet suggests he may be willing to forego escalation for now.
Officials from the world’s two biggest economies have been locked in negotiations on a phase-one deal since Trump announced it almost nine weeks ago.
The U.S. has added a 25-per-cent duty on about US$250 billion of Chinese products and a 15-per-cent levy on another US$110 billion of its imports over the course of a 20-month trade war. Discussions now are focused on reducing those rates by as much as half as part of phase one.
The new duties, which are due to go ahead at 12:01 a.m. Washington time on Sunday unless the administration signals otherwise, would hit some US$160 billion in consumer goods from China including smartphones and toys.