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According to reports reaching the press, President Donald Trump is about to announce a summit to sign a trade deal with China, which was concluded just after the markets opened Thursday. The Dow Jones has accumulated 160 points. This modest gain probably reflects past disappointments and uncertainty over whether Trump plans to maintain tariffs on imports from China.
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The Dow Jones rose 0.6%, while the S & P 500 gained 0.2%. The Nasdaq composite was slightly higher after a 0.3% drop in the stock market.
According to reports, the announcement of the Trump summit with Chinese President Xi Jinping would be announced Thursday. Trump is expected to meet with Liu He, China's deputy prime minister and chief trade negotiator, at the White House.
Point of friction of the trade agreement with China
The United States and China returned to the negotiating table in DC after China's trade talks in Beijing last week. Negotiators have finalized most elements of the trade deal with China. But before this week, there was a big area of disagreement.
Beijing insisted that all trade deals with China be implemented in a fair and two-way way. In other words, Trump rates must disappear. Trump said it wants to keep tariffs in place and remove them as China demonstrates compliance.
If this obstacle has been removed, it is likely that the United States will relax its requirements. China said it was in no hurry to sign a trade deal after Trump had eliminated a possible increase in tariffs.
The complete elimination of China's tariffs would probably be the best result for the Dow Jones. If rates are maintained, a cloud of uncertainty could block business investment decisions. The elimination of tariffs also reduces the risk that China may impose non-tariff measures harmful to US multinationals with a high exposure to China.
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