Global markets got a temporary respite from escalating trade tensions after US President Donald Trump and his Chinese counterpart Xi Jinping agreed a truce at the G20 Summit in Argentina this weekend. This move will also push back new trade tariffs on $200 billion’s worth of Chinese goods that Trump was planning to introduce from 1 January 2019.
Beijing now has 90 days to try and negotiate with Washington. However, Trump said he would proceed with the new tariffs if no agreement is reached on sweeping “structural changes” in trade relations, which experts have cautioned will be hard to achieve.
Meanwhile, Trump has suggested the Chinese may purchase, but have not agreed to do so yet, a “very substantial amount of agricultural, energy, industrial and other products from the United States” to address the trade imbalance between the two countries. The announcement had a positive impact on global markets, with Asian stock markets along with the Euro and Sterling opening the week higher as a sign of positive sentiment among investors at the prospect of the end of the trade war.
In the UK, Prime Minister Theresa May could have a rocky week ahead.
The Labour Party has said it would table a no-confidence motion in May’s government if the Brexit deal is voted down in the UK Parliament next Tuesday, 11 December. Dozens of Conservative MPs have already said they will reject the deal, while the Democratic Unionist Party (DUP) is also set to block it due to concerns over a border between Northern Ireland and mainland UK.
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