Monday, 3 December 2018

Trump, Xi agree on trade war ceasefire

The world heaved a sigh of relief over the weekend after China and the United States agreed to a ceasefire in their trade war on Saturday after talks in Argentina between US President Donald Trump and Chinese President Xi Jinping.

According to Reuters, the White House issued a statement saying that the US will leave tariffs on US$200 billion worth of Chinese imports at 10 percent at the beginning of the new year, agreeing to not raise them to 25 percent “at this time”.

“China will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries,” it said.

The White House said that the two leaders also agreed to immediately start talks on structural changes with respect to forced technology transfers, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture.

Analysts see the agreement as paving the way for more gains for markets.

“It sets a pretty positive tone (and) stocks should have a decent rally into December,” said Nathan Thooft, Boston-based global head of asset allocation for Manulife Asset Management.

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