This past weekend the world watched as Presidents Trump and Xi sat down for the highly anticipated dinner at the G20 summit. As the evening went on, the first whisper of news that a trade truce had been reached sparked immediate celebration and the potential promise for a break from the tariff roller coaster US companies have been on for months. As this week began and more details, or rather the lack thereof came out, we are now left to wager whether a solution or any progress was actually achieved over the weekend.
President Trump announced that he has reached a 90 day truce with China, suspending the 25% tariff scheduled to be implemented on January 1 on $200B in goods. However, his advisors are a bit confused as to when the 90 days begins, from 12/1 or from 1/1. Most reports indicate it should be a 90 day delay from the January 1 implementation date but there are no definitive statements yet. President Xi brought the news to China, but his message did not include the precursory 90 day limit on the truce.
US and Asian markets exploded on Monday with the news, but today US markets have yet again plunged with investors realizing there are far too few details to support confident opinion of the resolution. Experts in the matter have made continuous comments that the scope of the demands and the degree of negotiations required would surpass the 90 day time limit. Others add that China will in no way support the significant expectations of President Trump in their opinion. President Trump tweeted that US car imports to China would be reduced from 40% to zero, as well as making references to purchases of up to $1.2 trillion in agriculture. None of this has been confirmed from Chinese officials publicly.
So for now, we are all still in the dark with the threat of more tariffs still looming. If nothing else, at least the two leaders walked away from the meeting spreading positive news on the matter. We will continue to monitor this situation for further information.