Yahoo Finance's Jessica Smith, Aikiko Fujita, Julie Hyman and Adam Shapiro discuss the latest developments regarding the trade negotiations between China and the United States.
Also, David Nelson of Belpointe Asset Management discusses why he is not 'encouraged' with how the stock market is reacting to trade uncertainty between the United States and China.
Stocks began to recover some losses Wednesday as investors considered whether the U.S. and China would come to an agreement to resolve a more than year-long trade dispute before new tariffs are set to take effect Friday.
The S&P 500 (^GSPC) rose 0.33%, or 9.87 points, as of 3:02 p.m. ET. The Dow (^IXIC) advanced 0.51%, or 131.65 points. The Nasdaq (^IXIC) rose 0.27%, or 21.16 points.
Through market close Tuesday, each of the three major indices was off more than 2%, cutting into steep gains stocks had posted in the first several months of the year.
Investors were blindsided Sunday with a tweet from President Donald Trump stating he was set to raise tariffs on $200 billion worth of Chinese goods and tack on levies to an additional $325 billion of Chinese imports, ending a five-month trade ceasefire between the U.S. and China.
Trump was spurred to announce the additional tariffs after Chinese negotiators late last week reneged on a litany of key aspects of the working trade deal, Reuters reported Wednesday, citing unnamed government and private sector officials briefed on the matter.
According to the account, China backtracked on commitments that would require it to change laws to address U.S. concerns including intellectual property theft, forced technology transfers, competition policy, access to financial services and currency manipulation. Each of these issues has been high on the Trump administration’s list of priorities for an eventual trade deal, and had in large part catalyzed the trade war in the first place.
Some observers have speculated that Trump’s Twitter post was a negotiating tactic to push China toward more concessions, but a source in Reuters’ report refuted this notion as the only motive behind the additional threats.
On Wednesday, Trump insinuated in a pair of Twitter posts that the Chinese delegation was attempting to delay a trade deal until after the 2020 presidential elections, when a different candidate could take office and potentially reach a deal with more lenient terms. He added that he was “very happy with over $100 billion a year in Tariffs filling U.S. coffers.”
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