Asia Stocks Surge After Trump Announces Tariff Increase Delay

Stocks are surging in Asia on Monday in response to the news that U.S. President Donald Trump is planning to delay a list of additional Chinese tariffs that were scheduled to begin on March 1. The news provided the momentum to drive prices higher because it likely means both the United States and China are close to hashing out their long awaited trade deal.

Trump didn’t provide much detail on the decision, but in a series of posts on Twitter, he cited “substantial progress” in bilateral talks between the two economic powerhouses.

In his Tweet over the weekend, Trump said, “I am pleased to report that the U.S. has made substantial progress in our trade talks with China on important structural issues, including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues. As a result of these very productive talks, I will be delaying the U.S. increase in tariffs now scheduled for March 1. Assuming both sides make additional progress, we will be planning a Summit for President Xi and myself, a Mar-a-Lago, to conclude an agreement. A very good weekend for U.S. & China!”

In other news, China has committed to buying up to $1.2 trillion in U.S. goods, though as late as last week, the two sides were said to be far apart on issues concerning the forced transfer of intellectual property.

At 06:21 GMT, China’s Shanghai Index was trading 2921.20, up 116.97 or +4.17%. Hong Kong’s Hang Seng Index was at 28857.50, up 41.20 or +0.14% and South Korea’s KOSPI Index was trading 2231.00, up 0.50 or +0.01%.

U.S. Equity Markets

The major U.S. equity index futures contracts are trading higher on the hopes of a U.S.-China trade deal, but the buying is tentative. Investors are saying that although the extension of the deadline is a positive development, there are still plenty of long-term structural issues for both sides to hash out, including market access and intellectual property rights protection.

At 06:29 GMT, March E-mini S&P 500 Index futures are trading 2799.00, up 7.75 or +0.26%. March E-mini Dow Jones Industrial Average futures are at 26078, up 76 or +0.29% and March E-mini NASDAQ-100 Index futures are trading 7116.00, up 27.75 or +0.39%.