All eyes were on Argentina last week as President Trump met with Chinese President Xi Jinping to discuss the ongoing trade war between the two nations.
The first reports signaled that the two nations declared a trade truce, with both sides holding off on raising tariffs further. President Trump also signaled that they had made a “BIG leap forward,” and that China was going to make substantial agricultural purchases, a move that would help ailing U.S. farmers hurt by the ongoing trade war. On Monday, soybeans surged to a five-month high over $9.20 per bushel, while Dow Jones futures rocketed nearly 550 points higher on expectations for better trade.
However, the markets faltered later in the week as President Trump followed up his initial optimism with a threat, “I am a Tariff Man.” Additionally, a major Chinese business executive, Meng Wanzhou of tech-giant Huawei, was arrested in Canada for violating U.S. sanctions against Iran, a move that some view as political pressure against the Chinese. These stories roiled markets midweek, with the Dow futures losing over 1800 points (-7.0%) from Monday’s high to Thursday afternoon’s low, recovering only slightly by the weekend.
Longer-term, Chinese-American relations will continue to be the focus of markets worldwide as Presidents Trump & Xi each try to outmaneuver one another without damaging their domestic economies too badly in the process.