The stock market is on a high during Thursday trading on news that the United States and China have reached an agreement to roll back tariffs scheduled to take effect next month.
In the morning, all three benchmark indexes logged intraday records. As of 3:30 p.m. ET, the Dow Jones Industrial Average rose 0.6%, or 165 points, while the S&P 500 grew 0.23%, or 7 points, and the Nasdaq Composite climbed 0.16%, or 14 points.
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According to Chinese Commerce Ministry spokesperson Gao Feng, the upcoming “phase one” trade deal between the world’s two largest economies is expected to include a resolution to dismiss the 15% duty to be implemented on Dec. 15, which affects hundreds of millions of dollars worth of Chinese consumer goods, including footwear, apparel and accessories.
“The trade war started with tariffs and should end with the cancellation of tariffs,” he said in a news briefing.
Over the past couple of weeks, delegates from the U.S. and China have had “serious and constructive” discussions in an effort to secure a deal that would end their more-than-yearlong tariff dispute, Gao added. “Both sides have agreed to cancel additional tariffs in different phases, as both sides make progress in their negotiations.”
President Donald Trump and Chinese President Xi Jinping were initially set to meet during the two-day Asia-Pacific Economic Cooperation summit starting Nov. 16, bit the summit was canceled in late October due to protests in Chile following a proposed hike in the country’s public transportation fares. A location for an upcoming meeting has yet to be determined.
Last month, the U.S. leader met with Chinese Vice Premier Liu He, leading the two countries to agree to a “phase one” deal that includes China’s purchase of $40 billion to $50 billion worth of American agricultural products, as well as guidelines on intellectual property. The talks paused Trump’s planned tariff increase on Oct. 15, which would have boosted to 30% the existing duty of 25% already in place on $250 billion worth of Chinese goods.
Over the past year and a half, the U.S. and China have imposed new duties on billions of dollars in items coming from both countries. The first round of the fourth tranche of tariffs was taxed with a 15% levy on Sept. 1, leading China to retaliate with tariffs that ranged from 5% to 10%.
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