New York’s stock markets have opened higher after President Donald Trump tweeted that the US is “VERY close to a BIG DEAL” with China.
The excited Twitter outburst marks a turnaround from Trump’s views of the situation last week, when he said he would happily wait until after the late-2020 US presidential elections to strike a trade agreement with Beijing.
The Dow Jones industrial average was 0.93 per cent higher shortly after the bell, while the Nasdaq had climbed 0.87 per cent and the S&P 500 was up 0.9 per cent, hitting a new record high.
European stock markets had been treading water until Trump’s tweet gave them a boost. The FTSE 100 was up 1.05 per cent by 3pm, while Germany’s Dax was 0.65 per cent higher and the French CAC 40 was 0.52 per cent up.
Investors have long hoped for the gift of a phase one trade deal between the world’s two biggest economies to be delivered before Christmas.
Such a timeline has recently looked increasingly unlikely, however, as Trump has flip-flopped on the issue and Beijing and Washington have sparred over protests in Hong Kong.
Trump’s tweet – “Getting VERY close to a BIG DEAL with China. They want it, and so do we!” – will lift traders’ festive spirits. Yet it remains to be seen whether the President will hold this optimistic line.
The President’s intervention came just days before the 15 December deadline that will see the US further hike tariffs on Chinese goods unless it can be averted.
This morning, China’s commerce ministry said the two sides are in close talks. Yesterday, White House trade adviser Peter Navarro said it was up to Trump to decide whether to sign a deal.
“If we get a great deal, we’ll be in a good place,” he said. “But it will be the president’s decision. It will come soon.”