U.S. President Donald Trump announced on Sunday that he would delay his planned tariff increase on Chinese goods in light of the advances in the trade negotiations that have taken place in recent weeks. In a tweet announcing his decision, Trump said that he’s seen progress in the negotiations, specifically as related to intellectual property protection, technology transfers, and currency and agricultural issues. He is also planning a meeting between himself and Chinese President Xi Jinping at his Mar-a-Lago estate in Florida in the coming weeks. More specific plans were not released to the public.
Asian markets reacted strongly to Trump’s optimism on Monday, with the Shanghai Composite soaring an impressive 5.31 percent as of 2:50 p.m. HK/SIN, bringing the benchmark index into official bull territory, with a gain of more than 20 percent since January. The Shenzhen Composite was up 5.21 percent in the mid-afternoon, putting the index up 18 percent since January. Japan’s Nikkei 225 gained 0.48 percent, while the Hang Seng Index jumped 0.52 percent. Australia’s ASX 200 was up 0.31 percent.
Despite global optimism about the progress of the trade talks, U.S. Trade Representative Robert Lighthizer has said that there remain several sticking points that can cause problems for a final deal. Of specific concern is the need for China to adjust its treatment of state-owned enterprises and forced technology transfers, as well as the way it deals with cyber theft.
Oil Prices Head South
Oil prices were lower on Monday even as the potential for increased trade grew. U.S. WTI futures were down 0.17 percent to $57.16 per barrel, and Brent crude futures were down 0.31 percent to $66.91 per barrel. The declines came after U.S. energy firms cut the number of oil rigs operating for the first time in three weeks, after U.S. production hit an all-time high last week.