Topline: After an 18-month trade war, China and the U.S. have reportedly agreed to roll back tariffs on each other’s goods—and even though there’s no scheduled timeline for the rollbacks, the news sent U.S. stock indexes soaring in Thursday premarket hours.
- The rollbacks would occur in a series of phases, according to Bloomberg, which cited Gao Feng, a spokesperson for China’s ministry of commerce.
- Feng said that in order for a larger trade deal to be reached, both the U.S. and China would have to simultaneously cancel the same amount of tariffs on each other’s goods as the first phase.
- There is, however, no set date or location for President Trump and Chinese president Xi Jinping to sign an agreement.
- And Bloomberg indicated the U.S. has yet to confirm.
- Despite the lack of firm plans, Reuters reported that the agreement could be signed as soon as this month.
- Dow futures leaped in response to the reported roll backs, showing a 146-point increase before Thursday’s opening bell.
Crucial quote: “In the past two weeks, the lead negotiators from both sides have had serious and constructive discussions on resolving various core concerns appropriately. Both sides have agreed to cancel additional tariffs in different phases, as both sides make progress in their negotiations,” said Feng.
Key background: Trump said in October a “very substantial phase one [trade] deal” was reached with China, which agreed to purchase $40 to $50 billion of U.S. agricultural products and be more transparent about its currency. In exchange, the U.S. said it wouldn’t slap up to 30% tariffs on $250 billion in Chinese goods. The deal, considered only partial, sent stock indexes to near-record highs.
Tangent: China sentenced three nationals with maximum punishments (death and life sentences) Thursday for smuggling fentanyl into the U.S. Trump has long criticized China for not doing enough to limit the amount of fentanyl flowing into the U.S. The American opioid crisis has claimed 400,000 lives over the past two decades.
