Trump Extends China Trade Truce Markets Rally as Hopes Rise for Lasting Deal

The global financial markets reacted positively following President Donald Trump’s decision to extend the truce in the ongoing trade dispute between the United States and China for an additional ninety days. Signed late on Monday night, the executive order postpones the implementation of higher tariffs until 10 November, averting the imminent threat of a dramatic increase in import duty rates. In response, Beijing reciprocated by suspending its own planned tariffs on American goods, also for ninety days.

Trump had previously threatened to raise tariffs on Chinese imports to 245 per cent, with Beijing warning of retaliation at 125 per cent on American exports. Preservation of the baseline rates at 30 per cent on Chinese goods and 10 per cent on US products has fuelled optimism that a lasting trade agreement could emerge before the new deadline.

Stock exchanges across Asia-Pacific were buoyed by the renewed trade pause. Japan’s Nikkei index surged by 2.5 per cent to finish at a record 42867.69 points, whilst Australia’s ASX 200 reached an all-time high at 8880, rising 0.41 per cent. The Reserve Bank of Australia’s decision to lower interest rates to 3.6 per cent added further momentum to the rally. The Shanghai composite rose by 0.5 per cent, though Hong Kong’s Hang Seng found little change on the day.

European bourses echoed the global sentiment. London’s FTSE 100 climbed by 0.2 per cent and France’s CAC 40 by 0.5 per cent. The US markets followed suit, with the S and P 500 up by 0.9 per cent in opening trade, the Dow increasing by one per cent, and the Nasdaq growing by 1.1 per cent—both tracking towards historic highs. Improved US inflation figures added further encouragement to the market gains.

Analysts have maintained concerns about the potential repercussions on global economic stability if the trade impasse is not resolved. Mark Haefele of Swiss bank UBS described the extension as a promising move towards an agreement that could prevent significant disruptions in international trade. The latest period of negotiation may open the door for concessions on areas like technological export limits, rare-earth minerals, fentanyl controls and Russian oil purchases.

Oil prices reflected the improved outlook, with Brent crude futures advancing by 0.4 per cent to 66.90 US dollars a barrel and West Texas Intermediate crude at 64.20 US dollars. Hopes now turn to both sides capitalising on this pause to secure a more comprehensive and durable accord to underpin stability in global markets.