Stocks were trading higher Thursday after President Donald Trump tweeted that he will delay an upcoming tariff hike on $250 billion in Chinese imports by two weeks.
On Wednesday evening after the market close, Trump tweeted that a tariff hike from 25% to 30% on Chinese imports will be delayed from Oct. 1 to Oct. 15.
“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,” Trump said.
The slight concession by Trump suggests his temperament toward China has softened, since he initially wanted to double the 25% tariffs in October, according to CNBC.
Trump was reportedly outraged after learning about China’s new tariffs on $75 billion in U.S. products, but eventually settled on a 5% tariff hike.
China is reportedly attempting a two-track approach in trade negotiations, according to the Wall Street Journal.
China reportedly wants to deal with the issues of trade imbalance and national security in seperate lines of talks in an attempt to streamline an agreement on trade alone.
On Thursday morning, Treasury Secretary Steven Mnuchin told CNBC that Trump could agree to a trade deal at any time, but he’s pushing for the best possible deal for U.S. workers.
“And let me just remind you, these discussions have been going on for two-and-a-half years,” Mnuchin said. “And President Trump is only going to agree to a deal if it’s a good deal, a deal that’s good for U.S. companies and U.S. workers.”
Trump also tweeted about the trade war on Thursday.
“It is expected that China will be buying large amounts of our agricultural products!” he said.
The SPDR S&P 500 ETF Trust SPY was up 0.45% at the time of publication, while the iShares FTSE/Xinhua China 25 Index FXI was up 0.56%.
Given the unpredictability of Trump and the trade war negotiations up to this point, it’s difficult for investors to anticipate when and if a trade deal will be reached.
Yet with farmers and U.S. businesses suffering, Trump is facing increasing pressure to get a deal done before the trade war begins to serve as a liability during the 2020 campaign season.
Investors clearly see the good faith tariff delay by Trump as a positive sign that tensions have eased in the past month. More indications of positive developments in trade negotiations could push stocks even higher in coming weeks.
Do you agree with this take? Email email@example.com with your thoughts.
President Donald Trump is pictured on Tuesday, Sept. 10. White House photo by Shealah Craighead.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.