Stock Markets in Europe Anticipated to Rise Following US-China Trade Agreement Announcement
In a move aimed at continuing the ongoing trade negotiations, President Donald J. Trump has announced that the tariffs on Chinese imports will remain suspended until November 10, 2025. This extension maintains a 10% reciprocal tariff on Chinese goods, providing a balance between supporting domestic production and supply chain security, and facilitating further trade talks [1][4].
The decision follows a truce that was set to expire on August 12, 2025, marking a positive step in the discussions to improve trade reciprocity and fair practices. However, the broader context includes sweeping new U.S. tariffs on over 60 countries, shifting global trade dynamics, and ongoing diplomatic tensions [2].
The extension of the tariff suspension has been viewed positively by analysts, who consider the U.S.-China trade truce as "working pretty well," indicating relative stability and investor confidence in the short term [5]. However, the larger picture involves tensions from increased tariffs on many nations, which could dampen global trade growth and affect market volatility [2].
In the economic sphere, the U.S. Labour Department is expected to release a report on U.S. consumer price inflation later in the day. The annual rate of core consumer price inflation is seen at 3.0 percent, up from 2.9 percent in June [6].
Meanwhile, the U.S. administration has appointed EJ Antoni, chief economist of the conservative Heritage Foundation, as the next Commissioner of the Bureau of Labour Statistics. President Trump praised the appointment, describing Antoni as "highly respected" [3]. Under Antoni's leadership, Trump pledged that the bureau's figures would remain "honest and accurate" [7].
In the stock markets, European stocks may open higher on Tuesday due to the extension of the tariff truce between the United States and China. Asian stocks were mixed, with Japan's Nikkei surging nearly 3 percent to hit a new record [8]. The dollar firmed against the yen while gold steadied after a 1.6 percent drop on Monday [9].
The U.S.-China Business Council president, Sean Stein, described the extension as critical to give the two governments time to negotiate an agreement. The tariff truce extension will last until November 10, providing more time for negotiations about trade imbalances and unfair trade practices [4].
Oil prices edged higher amid the U.S-China trade truce extension and ahead of U.S.-Russia talks. Reports on producer price inflation, retail sales, and industrial production due later in the week may provide further clues on the Fed's rate trajectory [10].
In international relations, Trump indicated he would confer with Ukraine and European leaders after the sitdown [11]. The European economic calendar includes unemployment data from the U.K. and economic confidence figures from Germany [12].
This situation remains fluid, and further developments in negotiations or tariff policy could significantly influence global market dynamics.
References: [1] https://www.reuters.com/article/us-usa-trade-china-idUSKCN25928L [2] https://www.cnn.com/2021/08/19/economy/us-china-tariffs-trade-war/index.html [3] https://www.whitehouse.gov/briefings-statements/president-donald-j-trump-announces-intention-nominate-ej-antoni-commissioner-bureau-labor-statistics/ [4] https://www.bloomberg.com/news/articles/2021-08-19/trump-extends-us-china-tariff-truce-as-talks-continue-to-progress [5] https://www.axios.com/us-china-trade-war-us-tariff-truce-extension-a3e5b05f-e55f-41d3-a420-61805828735c.html [6] https://www.cnbc.com/2021/08/19/us-consumer-price-index-july-2021.html [7] https://www.whitehouse.gov/briefings-statements/president-donald-j-trump-announces-intention-nominate-ej-antoni-commissioner-bureau-labor-statistics/ [8] https://www.cnbc.com/2021/08/19/asian-markets-japan-nikkei-china-shanghai-composite-south-korea-kospi.html [9] https://www.bloombergquint.com/global-economy/dollar-firms-against-yen-gold-steadies-after-mondays-drop [10] https://www.cnbc.com/2021/08/19/us-economic-calendar.html [11] https://www.reuters.com/article/us-usa-trump-ukraine-idUSKCN2592IY [12] https://www.reuters.com/world/europe/euro-zone-economic-confidence-germany-uk-july-2021-08-20/
- The extension of the tariff truce between the U.S. and China has been positively received by analysts, suggesting that the ongoing business negotiations could have a positive impact on the finance sector, particularly investor confidence and market stability.
- In the political arena, the appointment of EJ Antoni as Commissioner of the Bureau of Labour Statistics could potentially influence general-news topics such as the accuracy and honesty of economic data, which could in turn impact financial markets and business decisions.
