This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.theguardian.com/world/2018/dec/03/trade-war-china-trump-markets-jump-car-tariffs
The article has changed 9 times. There is an RSS feed of changes available.
| Version 4 | Version 5 |
|---|---|
| Trade war truce: markets jump as Trump says China will halt new car tariffs | Trade war truce: markets jump as Trump says China will halt new car tariffs |
| (34 minutes later) | |
| Global stock markets rallied on Monday after the US and China agreed a 90-day truce in their trade war at a weekend meeting of the G20 nations in Argentina. | Global stock markets rallied on Monday after the US and China agreed a 90-day truce in their trade war at a weekend meeting of the G20 nations in Argentina. |
| The outcome of the two-and-a-half-hour dinner meeting between Donald Trump and Xi Jinping in Buenos Aires, following months of escalating tensions on trade and other issues, boosted financial markets around the world. | The outcome of the two-and-a-half-hour dinner meeting between Donald Trump and Xi Jinping in Buenos Aires, following months of escalating tensions on trade and other issues, boosted financial markets around the world. |
| The FTSE 100 index in London rose more than 2%, while Germany’s Dax jumped 2.6%, France’s CAC gained 2%, Spain’s Ibex rose 1.8% and Italy’s FTSE MiB gained 1.9%. | The FTSE 100 index in London rose more than 2%, while Germany’s Dax jumped 2.6%, France’s CAC gained 2%, Spain’s Ibex rose 1.8% and Italy’s FTSE MiB gained 1.9%. |
| In Asia, the benchmark Shanghai Composite index led the way with a rise of 2.57%, while Hong Kong was up 2.55% and Tokyo closed 1% better off. Australia’s benchmark ASX200 index finished the day 1.8% higher. | In Asia, the benchmark Shanghai Composite index led the way with a rise of 2.57%, while Hong Kong was up 2.55% and Tokyo closed 1% better off. Australia’s benchmark ASX200 index finished the day 1.8% higher. |
| The yuan strengthened against the dollar, rising 1% in early London trading. | |
| Washington agreed to postpone by 90 days the increase in tariffs from 10% to 25% on $200bn of Chinese goods, due to kick in on 1 January, while China pledged to import more US products, including – according to Washington – farm, energy and industrial products. This should help shrink the US trade deficit with China. | Washington agreed to postpone by 90 days the increase in tariffs from 10% to 25% on $200bn of Chinese goods, due to kick in on 1 January, while China pledged to import more US products, including – according to Washington – farm, energy and industrial products. This should help shrink the US trade deficit with China. |
| Trump tweeted that China had also agreed to “reduce and remove” tariffs on US car imports from the current 40% level but there was no confirmation from Beijing. | Trump tweeted that China had also agreed to “reduce and remove” tariffs on US car imports from the current 40% level but there was no confirmation from Beijing. |
| No – this is seen as a temporary respite in the trade spat between Washington and Beijing, which started in June after talks broke down. It will buy both sides more time to negotiate. The White House says there will also be immediate discussions on issues such as intellectual property protection, non-tariff trade barriers and cyber theft. | No – this is seen as a temporary respite in the trade spat between Washington and Beijing, which started in June after talks broke down. It will buy both sides more time to negotiate. The White House says there will also be immediate discussions on issues such as intellectual property protection, non-tariff trade barriers and cyber theft. |
| Yes – there was no joint communique and few details have emerged so far. Some analysts say the deal only kicks the can down the road and tensions will resurface in three months. | Yes – there was no joint communique and few details have emerged so far. Some analysts say the deal only kicks the can down the road and tensions will resurface in three months. |
| The Chinese economy is cooling and the Shanghai stock market has fallen almost 30% since the start of the year. A survey showed on Monday that new export orders at China’s factories extended their decline in November as the trade war took its toll. | The Chinese economy is cooling and the Shanghai stock market has fallen almost 30% since the start of the year. A survey showed on Monday that new export orders at China’s factories extended their decline in November as the trade war took its toll. |
| While Trump’s tough stance is popular with his Republican supporters, the US trade deficit with China has worsened. General Motors, the largest US carmaker, announced last week it would halt production at five North American factories and cut 14,700 jobs, a decision partly prompted by the impact of Trump’s tariffs. | While Trump’s tough stance is popular with his Republican supporters, the US trade deficit with China has worsened. General Motors, the largest US carmaker, announced last week it would halt production at five North American factories and cut 14,700 jobs, a decision partly prompted by the impact of Trump’s tariffs. |
| The trade truce came as a positive surprise to markets after Trump’s combative comments in the past fortnight. The rally shows how sensitive global markets are to trade tensions. Julia Kollewe | The trade truce came as a positive surprise to markets after Trump’s combative comments in the past fortnight. The rally shows how sensitive global markets are to trade tensions. Julia Kollewe |
| Markets were cheered by news that Washington had deferred its plan to raise the tariff on $200bn (£156bn) of Chinese imports from 10% to 25%, for 90 days, to allow more time for negotiations. The tariffs were scheduled to take effect on 1 January. | Markets were cheered by news that Washington had deferred its plan to raise the tariff on $200bn (£156bn) of Chinese imports from 10% to 25%, for 90 days, to allow more time for negotiations. The tariffs were scheduled to take effect on 1 January. |
| In return, China agreed to purchase a “very substantial” amount of US goods including farm, energy and industrial products. This would help narrow the large trade gap between the two countries. Trump declared that China would also “reduce and remove” tariffs below the 40% level that Beijing is currently charging on US cars. | In return, China agreed to purchase a “very substantial” amount of US goods including farm, energy and industrial products. This would help narrow the large trade gap between the two countries. Trump declared that China would also “reduce and remove” tariffs below the 40% level that Beijing is currently charging on US cars. |
| The two sides also agreed to begin discussions on how to resolve other issues of concern, including intellectual property protection, non-tariff trade barriers and cyber theft. | The two sides also agreed to begin discussions on how to resolve other issues of concern, including intellectual property protection, non-tariff trade barriers and cyber theft. |
| Neil Wilson, the chief market analyst at Markets.com, said this could spark a pre-Christmas rally through December. “Some may be concerned that there was no official word from China in relation to auto tariffs, and that the two sides are saying different things about the meeting,” he said. | Neil Wilson, the chief market analyst at Markets.com, said this could spark a pre-Christmas rally through December. “Some may be concerned that there was no official word from China in relation to auto tariffs, and that the two sides are saying different things about the meeting,” he said. |
| “Nevertheless, when both sides can claim they won, it’s usually good for sentiment. This is all shaping up to be positive for equities and other risk assets … This positive rhetoric and mood music is likely to be sustained through December as the two sides seek a deal, which is likely to mean we see a decent Santa rally through December.” | “Nevertheless, when both sides can claim they won, it’s usually good for sentiment. This is all shaping up to be positive for equities and other risk assets … This positive rhetoric and mood music is likely to be sustained through December as the two sides seek a deal, which is likely to mean we see a decent Santa rally through December.” |
| The White House warned the existing 10% tariffs on $200bn of Chinese goods would be lifted to 25% if no deal was reached within 90 days, once again setting the clock ticking for a potential standoff at the end of March 2019. | The White House warned the existing 10% tariffs on $200bn of Chinese goods would be lifted to 25% if no deal was reached within 90 days, once again setting the clock ticking for a potential standoff at the end of March 2019. |
| China has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40%. | China has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40%. |
| Analysts cautioned that the trade deal may have only bought some time for more wrangling over the deeply divisive trade and policy differences, and said China’s economy would continue to cool due to weakening domestic demand. | Analysts cautioned that the trade deal may have only bought some time for more wrangling over the deeply divisive trade and policy differences, and said China’s economy would continue to cool due to weakening domestic demand. |
| “This is a relief rally,” said Paul Kitney, the chief equity strategist at Daiwa Capital Markets in Hong Kong. The agreement “is not a ceasefire, it’s just a de-escalation,” he said. “The existing tariffs are still having a negative impact on the Chinese economy, they haven’t gone away.” | “This is a relief rally,” said Paul Kitney, the chief equity strategist at Daiwa Capital Markets in Hong Kong. The agreement “is not a ceasefire, it’s just a de-escalation,” he said. “The existing tariffs are still having a negative impact on the Chinese economy, they haven’t gone away.” |
| His comments were borne out by figures released on Monday showing that China’s factory activity grew slightly in November, though new export orders extended their decline in a further blow to the sector already hurt by trade frictions. | His comments were borne out by figures released on Monday showing that China’s factory activity grew slightly in November, though new export orders extended their decline in a further blow to the sector already hurt by trade frictions. |
| Chinese state media cautiously welcomed the trade war truce. But in an editorial, the official China Daily warned that while the new “consensus” was a welcome development and gave both sides “breathing space” to resolve their differences, there was no “magic wand” that would allow the grievances to disappear immediately. | Chinese state media cautiously welcomed the trade war truce. But in an editorial, the official China Daily warned that while the new “consensus” was a welcome development and gave both sides “breathing space” to resolve their differences, there was no “magic wand” that would allow the grievances to disappear immediately. |
| “Given the complexity of interactions between the two economies, the rest of the world will still be holding its collective breath,” it said. | “Given the complexity of interactions between the two economies, the rest of the world will still be holding its collective breath,” it said. |
| The Global Times, a widely read Chinese tabloid, published by the ruling Communist party’s official People’s Daily, warned people had to have realistic expectations. | The Global Times, a widely read Chinese tabloid, published by the ruling Communist party’s official People’s Daily, warned people had to have realistic expectations. |
| “The Chinese public needs to keep in mind that China-US trade negotiations fluctuate. China’s reform and opening-up’s broad perspective recognises that the rest of the world does things differently,” it said in its editorial. | “The Chinese public needs to keep in mind that China-US trade negotiations fluctuate. China’s reform and opening-up’s broad perspective recognises that the rest of the world does things differently,” it said in its editorial. |
| China | China |
| Asia Pacific | Asia Pacific |
| Donald Trump | Donald Trump |
| Xi Jinping | Xi Jinping |
| Global economy | Global economy |
| news | news |
| Share on Facebook | Share on Facebook |
| Share on Twitter | Share on Twitter |
| Share via Email | Share via Email |
| Share on LinkedIn | Share on LinkedIn |
| Share on Pinterest | Share on Pinterest |
| Share on Google+ | Share on Google+ |
| Share on WhatsApp | Share on WhatsApp |
| Share on Messenger | Share on Messenger |
| Reuse this content | Reuse this content |