Donald Trump has said he will sign a long-awaited trade agreement with China on January 15. Tradefair brings you the latest from US politics...
I will be signing our very large and comprehensive phase one trade deal with China on January 15."
- Donald Trump
Donald Trump has given a strong signal that the long-running trade dispute between the US and China is nearing its end, confirming on Twitter that he will sign a phase one trade deal on January 15.
The world's two largest economies have been locked in a trade battle for nearly 18 months, which has seen the countries impose tariffs on billions of dollars worth of one another's goods.
Trump's tweet on December 31 provided an end-of-year boost for stock markets, capping a strong month in which the major US indexes climbed to record highs.
What did Trump say?
The president confirmed in his tweet that he will sign a "very large and comprehensive" phase one trade deal with China on January 15.
He said the signing ceremony will take place at the White House, with "high-level representatives" from China in attendance. Trump also said he will be travelling to Beijing "at a later date" to commence negotiations on phase two of the agreement.
The confirmation represents a big step forward in the trade negotiations, which almost suffered a major setback earlier in December when the US came close to introducing a fresh wave of tariffs on Chinese imports.
Higher import taxes were due to come into effect on December 15, but this was avoided after the two sides reached a preliminary trade agreement. Had the tariffs been introduced, American consumers would have faced higher prices for Chinese-made goods such as clothes, toys and smartphones shortly before Christmas.
The text of the phase one trade deal has not been shared publicly, but it emerged last month that Beijing had committed to purchasing more American agricultural goods and increasing intellectual property protections for US products, while Washington agreed to roll back some tariffs.
What happens next?
With the official signing of the phase one trade deal not due to happen until January 15, tariffs of 25% on $250 billion worth of Chinese goods remain in place, although the US is expected to reduce tariffs on $120 billion of Chinese imports to 7.5%.
This agreement doesn't mean the trade dispute between the US and China is fully resolved, with reports suggesting that some of the thorniest issues are likely to be addressed in the phase two negotiations.
One of the subjects the Trump administration is expected to focus on in future talks is China's provision of subsidies - specifically whether they offer unfair advantages to Chinese state-owned companies.
As far as domestic politics in the US is concerned, any progress in the trade negotiations with China and resulting benefits for the American economy could become a central theme in Trump's campaign for re-election in November 2020.
The president has claimed in the past that his leadership has helped turn the US economy into "the envy of the world".
Markets end 2019 on a high
Trump's confirmation of the phase one trade deal helped US stocks stage a late rally on December 31.
The S&P 500, which registered a record-high closing price on Friday December 27, was in negative territory for most of the trading session on the last day of the year, but made strong gains in the final hour to finish the day 0.3% higher.
Following a similar pattern, the technology-heavy Nasdaq Composite also closed with a 0.3% gain.
In China, the Shanghai Composite Index was up by more than 0.4% on December 31 and continued its positive trend on January 2, finishing more than 1.1% up on the previous trading day's close.
Overall, 2019 was a strong year for stock markets around the world, with investors seeing a welcome return to form after 2018, when many global indexes suffered their worst year in a decade.
The S&P 500 and Nasdaq both increased by about 30% over the course of 2019, while the Dow Jones Industrial Average added more than 20%.
In London, the FTSE 100 closed at 7,542.44 points on New Year's Eve, meaning the index was up by 12% over the year, despite the economic and political uncertainty caused by Brexit and the UK's general election in December.
The Shanghai Composite made total gains of 24% during 2019, while Germany's Dax index finished the year 25% higher.
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