The trade war with China may be over sooner than expected.
Just days ago, fears resurfaced that President Trump would raise tariffs from 10% to 25% on $200 billion worth of Chinese imports, if an agreement could not be reached by March 1.
However, that doesn’t appear likely any longer.
In fact, over the weekend, President Trump tweeted that he would delay U.S. tariffs on China.
“As a result of these very productive talks,” he noted, “I will be delaying the U.S. increase in tariffs now scheduled for March 1. Assuming both sides made additional progress, we will be planning a Summit for President Xi and myself, at Mar-a-Lago, to conclude an agreement. A very good weekend for U.S. & China.”
The President also cited “substantial progress” on trade talks with China, covering important “structural issues including intellectual property protection, technology transfer, services, currency, and many other issues.”
That’s why markets exploded early Monday morning.
Chinese Markets also had their Best Day in More than 3 Years
Once China’s Xinhua news agency noted that the two sides “came a step closer to realizing the important consensus reached” by Trump and Xi Jinping, markets exploded. In fact, the Shanghai Composite was up as much as 5.6% – its biggest one-day percentage rally since July 2015.
Even the smaller-cap Shenzen Composite jumped 5.6% on the day.
An end to the trade war would be quite beneficial to China.
Its economy had been battered by existing tariffs, which hit $200 million worth of Chinese imports to the U.S. It also sent China’s GDP growth tumbling to 6% -- the lowest in about two decades.
Now that an agreement is closer, it’ll boost China’s economy, and put an end to the doom and gloom headlines forecasting a global economic slowdown.
It could also open sizable opportunities in incredibly oversold stocks – some of which we’re likely to feature in the next few issues of The Cheap Investor. Stay tuned for more.