Wall Street jumps on trade war truce, Russell 2000 hits record

Daniel Fowler
May 22, 2018

Stocks indexes gave back some of their gains in midsession trade Monday, staying positive on lessening tensions between the US and China.

China agrees to the framework of a deal that includes increased sales of US farm products to China by 35 to 40 percent.

Mnuchin has said to expect to see a big increase - 35 percent to 45 percent this year alone - in usa farm sales to China.

U.S. Trade Rep. Robert Lighthizer issued a sharp statement: "Getting China to open its market to more U.S. exports is significant, but the far more important issues revolve around forced technology transfers, cyber theft and the protection of our innovation".

A day after declaring the trade war "on hold", Mnuchin told CNBC Monday that Trump is reserving the right to reimpose tariffs against Chinese goods if the two countries can't agree on specifics to bring down the massive trade deficit with Beijing.

And while Treasury Secretary Steven Mnuchin predicted big increases in agriculture and energy related sales to the Chinese market - moves that could benefit Louisiana farmers and businesses - trade experts said it's too soon to know what will happen.

"We're pleased that the two sides apparently made enough progress to dial back on the tariffs and other threats", says John Frisbie, president of the U.S.

China's government also said Monday it cannot guarantee trade tensions with Washington can be permanently avoided.

US Steel is tumbling after President Donald Trump announced he will pause US tariffs on Chinese goods.

Vermont Senator Bernie Sanders announces his re-election bid
Senate and that he wants to continue to serve in the Senate as a way to counter the policies of President Trump. And many consider him as a possible candidate for the Democratic presidential nomination in 2020.

China's state-run news agency Xinhua quoted Vice Premier Liu He, who led Chinese negotiators in trade talks in Washington, as saying, "The two sides reached a consensus, will not fight a trade war, and will stop increasing tariffs on each other".

"The big news over the weekend was that a trade war was averted, and so we had an adjustment, covering bets that there would be negative news coming out of the discussion", said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

China represents a massive opportunity for USA shale gas, with the nation set to become the world's largest LNG importer in the next decade as it switches to the cleaner-burning fuel from coal.

On Saturday, the White House issued a joint statement from the two countries in which the US and China pledged to take measures to "substantially reduce" America's massive trade deficit.

On Monday morning, Trump sought to dispel the public's concerns about the (ostensibly) lackluster results of last week's trade talks.

Europe has also raised the possibility of backing a drive to reform the World Trade Organization, the global trade watchdog that Trump accuses of being soft on China and harmful to U.S. interests.

"I think they got the story totally wrong", Mnuchin said about the Wall Street Journal report. That really wasn't the issue.

Larry Kudlow, Trump's top economic adviser, also stressed that the deal was a preliminary agreement and there were many details to work out. "Of course, we do not want to see any reversal", said Lu.

In a separate controversy, the Commerce Department last month blocked China's ZTE Corp. from importing American components for seven years, accusing the telecommunications company of misleading USA regulators after it settled charges last year of violating sanctions against Iran and North Korea.

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