Donald Trump Extends China Trade Truce, Global Markets Hit Record Highs

Donald Trump’s move to prolong the ceasefire in the US-China trade war sent a wave of optimism across global markets. The US president signed an executive order on Monday night delaying the tariff hike on Chinese imports until November 10, giving both sides a fresh 90-day window for negotiations. Beijing followed up by announcing a suspension of additional tariffs on US goods for the same period.

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Markets React Positively

The announcement triggered a rally in Asia-Pacific markets. Japan’s Nikkei index surged 2.5% to a record 42,867.69 points, while Australia’s ASX 200 touched an all-time high of 8,828.67, gaining 0.14%. The Australian market was further buoyed by the Reserve Bank of Australia’s decision to slash interest rates to a two-year low of 3.6%.

China and Hong Kong Moves

In mainland China, the Shanghai Composite Index climbed 0.5%, while Hong Kong’s Hang Seng Index traded flat. Investors are increasingly hopeful that negotiators will finalize a trade deal before the end of this extended tariff pause.

Tariff Threats Still Loom

Despite the optimism, both sides have warned of severe tariff hikes if talks fail. Trump has threatened tariffs as high as 245% on Chinese imports, while Beijing has signaled potential retaliatory measures of up to 125%. Currently, US exports to China face around 30% tariffs, and Chinese imports to the US carry a baseline of 10%, plus an additional 20% linked to fentanyl-related disputes.

Global Economic Impact

Economists caution that the prolonged trade war has already strained the global economy by raising costs, disrupting supply chains, and slowing cross-border trade. However, the current truce is seen as a chance to de-escalate tensions and revive economic momentum.

Oil Prices Edge Higher

Oil markets also reacted positively, with Brent crude futures up 0.4% at $66.90 a barrel and US West Texas Intermediate crude climbing 0.4% to $64.20, as hopes of a US-China agreement lifted global demand expectations.

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