Trump could derail trade war truce as China and US resume negotiations, experts warn
A 90-day truce is set to end on 1 March
A 90-day truce agreed by the two countries is due to come to an end on 1 March, and if no further agreement is reached by then, stringent tariffs on both sides are set to come into force.
The truce was reached at the G20 summit in Buenos Aires last year, with Donald Trump agreeing to pause plans to raise tariffs on $200bn (£155bn) worth of Chinese goods, including electronics and assorted foods.
Markets are hopeful that an end to the US-China trade war might be in sight, with Chinese stocks rising on Monday after a week-long holiday.
But analysts warned that there is always a chance that Mr Trump could derail a deal between the world’s biggest economies.
“With Trump stating that he has no plans to meet Xi Jinping before (1 March), many believe it diminishes the chance of a comprehensive deal to stave off higher tariffs,” said traders at IG.
Hussein Sayed, chief market strategist at FXTM, said: “Investors need to manage their expectations, especially with conflicting messages from President Trump.”
Meanwhile, Naeem Aslam, chief market analyst at Think Markets, said: “Betting on Trump is not something which many investors feel comfortable with and it is something you will have to keep in mind as a trader.”
However, he added: “Given that the deadline is just around the corner before the US slaps more tariffs on China, it is highly likely that both sides choose to extend the current deadline.
“As long as the US does not slam more tariffs on China and the negotiations process continues, I believe the overall situation would remain a lot more optimistic.”