6 Stocks Set To Gain As U.S.-China Trade Tensions Ease

Stocks finished in the green for the fourth straight day on Jan 18 following media reports which suggested that U.S.-China trade relations were set to improve. The resulting optimism helped to outweigh concerns emanating from the government shutdown and mixed fourth-quarter earnings numbers.

Recently, both sides have been making optimistic comments which suggest that a deal could be reached soon to end this long-running dispute. Technology, materials and industrial stocks are likely to benefit the most from such an agreement. Adding stocks from these sectors to your portfolio looks like a smart choice.

China Offers to Hike U.S. Imports, Says Bloomberg

The major catalyst to Friday’s gains was a report from Bloomberg, per which China is looking to raise its U.S. imports by $1 trillion. The escalation, which is likely to take place over the next six years, would eliminate the U.S.-China trade deficit completely by 2024. Last year, China’s trade surplus with the United States came in at $323 billion.

The report goes on to state that this offer was made during trade talks with Beijing in December. U.S. officials expressed their doubts about the offer and asked China to erase the misbalance completely over the next two years. Economists also think a complete elimination of trade surplus is hard to achieve.

However, other market watchers believe that China could achieve this target by creating a trade surplus with other trading partners. This could intensify the imbalance with other partners, but China would end up buying more U.S. products, including cars, aircraft and soybeans. 

Trump Exudes Optimism About Trade Deal

On Jan 19, U.S. President Donald Trump exuded optimism about chances of a trade deal with China, indicating significant progress had taken place on this front. His comments follow discussions between top officials from both sides which took place in Beijing earlier this month.

According to Trump, a trade agreement “could very well happen” following an “extraordinary number of meetings.” However, he brushed aside reports that his administration was looking to remove tariffs on China imports.

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Gary Anderson 3 months ago Contributor's comment

It looks likeTrump is lying. Things are not going so well in the negotiations.