Trade war ceasefire?

After the G20 top meeting, the two leaders are now announcing a 90 days pause in the trade war.

Investors have been holding their breaths before the meeting between president Xi Jinping and president Donald Trump at G20 in Buenos Aires.

The tone between the two presidents seemed more constructive and optimistic than usual. Trump had earlier announced that he would raise the current tariffs from 10% to 25% in January if China did not open its markets further, but he has now agreed to wait 90 days before implementing further tariffs.

According to several medias, the trade war could be re-negotiated again as early as in mid-December.

After the optimistic news, Dow futures went up over 500 points while oil prices climbed 5%. Also the asian markets reacted positively with NIKKEI up 1.00% and the Shanghai composite index went up 2.5%.

On the night of Monday December 3. Donald Trump tweeted that China has agreed to remove tariffs on cars coming into China from the US, the tariff is currently 40% – a statement that pushed the automotive stocks up on monday morning. The Chinese government had no comments to president Trump’s tweet.

All in all, the results from the meeting is quite positive in the eyes of the investors, even though there are still some cautiousness in the markets as the mood can shift abruptly in the near future.