Trump sign-off needed as US and China ‘agree trade deal terms’
US stock markets have surged after Donald Trump tweeted his administration was “very close” to securing a trade pact with China.
The president, who has raised market hopes of an end to his trade war with the world’s second-largest economy several times before- only for expectations to be dashed – sent the message just after markets had opened on Wall Street.
He tweeted: “Getting VERY close to a BIG DEAL with China. They want it, and so do we!”.
Mr Trump’s tweet will be widely seen as confirmation the US is unlikely to escalate the dispute, which has raged since the summer of 2018, by imposing tariffs on nearly $160bn worth of Chinese consumer goods from Sunday.
The post was credited with pushing the S&P 500 Index to fresh highs in early share dealings while the Dow Jones Industrial Average was 0.5% up.
US stocks had opened, moments earlier, in negative territory as the Sunday deadline loomed.
Getting VERY close to a BIG DEAL with China. They want it, and so do we!
— Donald J. Trump (@realDonaldTrump) December 12, 2019
Apple was among the biggest fallers on a report that iPhone shipments had fallen sharply in China last month.
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In London, the FTSE 100 had been trading 0.6% higher in advance of the tweet being published.
It was later trading 1.1% up on the day – with financial stocks leading the gainers.
Positive signals over the status of the trade war peace talks had emerged earlier on Thursday.
A spokesman for the Chinese commerce ministry told reporters: “The two sides’ economic and trade teams are maintaining close communication.”
Beijing has pledged to retaliate should the US not delay the threatened extension of tariffs to goods including toys and computer games consoles.
There has been a series of tit-for-tat trade tariffs in the 17-month long dispute which has been widely blamed for hurting the wider world economy through weakened demand for exports.
China’s response – should the new US tariffs kick in – will see the activation of previously announced tariffs on goods including corn, wheat and small aircraft.
It has also threatened to reintroduce 25% tariffs on US-made vehicles.
Mr Trump will be keen to secure agreement with China as his presidency is tested by an impeachment process and slowing economy that has seen the US central bank cut rates three times since the summer.
The next presidential election is due in November next year.
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