The ASX 200 (ASX: XJO) has risen 0.6% in early reaction to the news that the US and China have made some small concessions to each other.
President Trump has been battling China over what he describes as unfair trade practices where US companies have less access into China than vice versa and Chinese that businesses get access to US intellectual property legally or, allegedly, illegally.
What Happened Today?
US President Trump has announced that the United States will delay its tariff increases on Chinese goods by two weeks as a gesture of goodwill.
The Tweeter-In-Chief said via Twitter, “At the request of the Vice Premier of China, Liu He, and due to the fact that the People’s Republic of China will be celebrating their 70th Anniversary on October 1st, we have agreed, as a gesture of good will, to move the increased Tariffs on 250 Billion Dollars worth of goods (25% to 30%), from October 1st to October 15th.”
These delays came as China decided to release a list of 16 US imports that will be exempted from tariffs such as animal feed and anti-cancer medication.
However there are still plenty of US products that will be taxed, over 5,000, by China.
These are important signals because trade talks are scheduled to take place with preliminary talks later in September and full talks in October, which could signal the start of a slowdown to the trade war.
You can see why Chinese-exposed shares like BHP Group Ltd (ASX: BHP), Fortescue Metals Group Limited (ASX: FMG) and A2 Milk Company Ltd (ASX: A2M) have all seen their share prices rise in pleased reaction to this news.
Some market commentators seem to think that President Trump now needs to make a deal with the US economy faltering so that he has a good economy going into the next election.
I’m not personally going to be making any investment choices just because of a couple of positive tweets – his mood easily changes – but it is a very positive potential catalyst coming up to the end of the year.
I’ve got my eyes on the growth shares in the free report below that could be good ideas to beat the market over the next few years.
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