BEIJING: Asian markets rallied Monday and the dollar extended gains after the US and China said they had agreed to hold off imposing tariffs, averting a potentially damaging trade war .
After high-level talks in Washington the two economic superpowers revealed a deal had been hammered out, ending months of tension that have sent financial markets into a frenzy.
Treasury Secretary Steven Mnuchin told Fox News on Sunday “right now we have agreed to put the tariffs on hold” while Xinhua reported China’s Vice Premier Liu He as saying “the two sides reached a consensus, will not fight a trade war , and will stop increasing tariffs on each other”.
While short on detail, the announcement provided much relief to investors, who had been fearing the imposition of levies on billions of dollars of exports between the two sides.
“The latest statement on the China-US trade suggests both parties are happy to avoid the dreaded tit-for-tat escalation while working towards a more market-friendly bilateral trade agreement,” said Stephen Innes, head of Asia-Pacific trade at OANDA.
“But the intentional vagueness delivered by both parties’ statements suggests a great divide, but there’s a hint of a consensus, none the less, to bridge that gap. So given the possible worst-case scenario was avoided the market should view the latest trade discussions as a favourable.”