USA stocks jump as trade war fears subside
- Author: Lawrence Cooper May 23, 2018,
May 23, 2018, 0:05
James Zimmerman, a Beijing-based lawyer and a former chairman of the American Chamber of Commerce in China, said the Trump administration's decision to walk back its threatened trade actions was premature and a "lost opportunity" for American companies, workers and consumers.
He added that on Friday he spoke directly to Trump for half an hour about the matter, and also to other administration officials.
The U.S. and China concluded two days of trade negotiations with an agreement not to impose tariffs on each other, while Beijing said it will buy more farm goods, energy and other products and services from U.S. companies.
The second person said China may also eliminate tariffs on USA agriculture products it assessed in response to US steel duties as a part of the deal, and that ZTE could still be forced to replace its corporate leadership, among other penalties. The Chinese company was sanctioned by Washington after it was caught illegally shipping goods to Iran and effectively put out of business, but its fate was made a precondition of last week's trade talks in a conversation between Trump and President Xi Jinping. China counterpunched with tariffs on USA products, rattling the market.
Media reports suggested that the USA was offering to swap a ZTE rescue for an end to proposed Chinese tariffs on US farm products.
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However, much remains unresolved, including how much - and what - the Chinese will actually agree to purchase and whether the country will make other changes that the administration has been pushing for, such as relaxing restrictions on US companies operating in China. Trade experts cautioned that this suspension of tariffs could hurt the president's leverage in ongoing talks with China.
Since the meetings concluded, the Trump administration has appeared to offer mixed messages about the status of the discussions and whether China had actually agreed to buy an additional $200 billion of USA products to reduce the trade deficit, as administration officials had previously indicated.
Last month, the administration proposed tariffs on $50 billion of Chinese imports to protest the forced technology transfers. Most observers say a firm deal is likely to take a long time.
Schumer fired back: "When it comes to being tough on China trade, I'm closer to Trump than Obama/Bush. The framework deal reported this weekend only makes it worse", Stumo said. Mnuchin is "promising to win something already happening. the U.S.is folding again".
"As trade tensions settle and peak growth/earnings anxieties subside, the clouds are lifting for stocks", JPMorgan analysts said in a note.
The market is also weighing the possibility of additional USA sanctions on the country.
Early in the trading session, the Big Board pared down some of its gains, but still managed to add 276 points, led higher by Intel, General Electric, Boeing and Caterpillar, which all posted gains of more than 2%.