U.S. stocks showed little direction in premarket trading on Wednesday after China announced it will extend a suspension of additional tariffs on U.S. goods for one year, signalling a continuation of the fragile trade truce between the world’s two largest economies.
The Dow Jones Industrial Average was flat, while the S&P 500 and Nasdaq Composite edged 0.2% to 0.3% lower, as investors weighed the implications of the renewed agreement on global trade and inflation prospects.
The move formalises the deal reached last week in talks between Chinese President Xi Jinping and U.S. President Donald Trump during their meeting in South Korea, where the leaders agreed to prolong the current trade détente for another year.
A statement released on the Chinese Ministry of Finance website, citing the State Council, confirmed that:
“For one year the 24% tariff on U.S. goods will continue to be suspended, and a 10% tariff on U.S. goods will remain.”
The decision, effective November 10, reflects “the consensus reached in the China-U.S. economic and trade consultations,” the ministry added.
On Tuesday, President Trump reciprocated by formalising a U.S. move to halve additional tariffs on Chinese imports from 20% to 10%, also effective from November 10, in a step aimed at easing trade tensions.
