According to reports from the South China Morning Post published on Thursday, the United States and China have come to a tentative truce in their trade conflict two days before U.S. President Donald Trump meets Chinese President Xi Jinping at the G-20 Summit in Japan. Details of the agreement are expected to be divulged via a series of press releases, not through a joint statement. If implemented, the truce would prevent the advancement of another round of tariffs which is threatening to impose levies on an additional $300 billion of Chinese goods.
According to a new report by the World Trade Organization that was published by the South China Morning Post, the increase in trade tensions since the start of 2019 has created a “dramatic spike” in barriers to doing business between the G20 nations. In the months between mid-October 2018 and mid-May 2019, twenty new restrictions were introduced, impacting trade values of $335.9 billion. These restrictions have included import bans, new tariffs, and updated customs procedures for exported products.
Roberto Azevedo, the WTO’s general director, said that these finding should be “of serious concern” to the whole international community, and he called upon G20 leaders to reduce the strains that are currently burdening the international trading system.
Market Movements
The dollar firmed against the yen on Thursday morning, hitting its highest point in a week before retreating slightly. The greenback was up 0.28 percent as of 1:31 p.m. HK/SIN, to trade at 108.07. The dollar index advanced 0.16 percent to 96.37 .DXY as the dollar also gained against most of its primary trading partners. The British pound continued its downward spiral against the dollar, falling 0.06 percent to $1.268. The euro also eased further, trading down 0.17 percent to $1.1349.
On the stock markets, Asian benchmarks were trading broadly higher on news of the trade truce, after struggling in the past few sessions. The Nikkei 225 was up 0.92 percent in the early afternoon, while Hong Kong’s Hang Seng Index saw gains of 1.12 percent. China’s primary benchmarks, the Shanghai Composite and the Shenzhen Composite were up 10.01 percent and 1.38 percent respectively. South Korea’s Kospi also saw gains of 0.87 percent.