Trump Says Tariff Roll-Back Reports Untrue

Equities Higher on Trade Hopes

Late on Friday, markets were boosted by news that Trump had agreed to roll-back tariffs on Chinese goods as part of the effort to get a trade deal signed. However, over the weekend, Trump stated that the reports were untrue and clarified that he has not agreed to roll-back tariffs on Chinese goods.

The reports emanated from comments made by the Chinese Ministry of Commerce saying that the two countries had agreed to remove tariffs in stages. This was to allow for an end to the trade war which has gone on for 18 months and ravaged both economies.

Chia Demands Tariff Removal

China has consistently demanded that tariffs be rolled back as part of its criteria for doing a deal. With the US having recently postponed the latest scheduled set of tariffs, many were hopeful that negotiations were leading in the right direction. However, Trump has made it clear that wide-scale rolling back of tariffs is not on the cards, at least not yet.

Trump Says Roll-Back Reports Not True

Speaking with reporters, Trump said:

“They’d like to have a rollback but I’ve not agreed to anything. China would like to get somewhat of a rollback, not a complete rollback because they know I won’t do it.

We’re getting along very well with China. They want to make a deal … frankly, they want to make a deal a lot more than I do. I’m very happy right now, we’re taking in billions of dollars.”

Trade Deal Expected to Be Signed This Weekend

Currently, traders are waiting for Trump and Xi to sign the deal agreed upon in early October. The hope is that this will occur when they meet in Chile at the end of the week.

Trump has been pushing for a November signing and is keen to move on to discussions for “phase two” of the deal. However, the US has warned China that any further delays will be met with consequences.

He has stated that as of December 15th, if a deal is yet to be signed, it will apply new tariffs to $156 billion of Chinese goods. With the threat of further tariffs looming, traders are hopeful that China will cooperate, avoiding the need for further tariffs.

Two-Way Risk

Equities markets have been well support over recent weeks as headlines and comments around the talks continue to suggest a deal is coming. Given the built-up level of expectation in the market, if China does not sign off on the deal this week, we are likely to see traders react with disappointment.

This could see some sharp reversals in equities markets.

Central banks and the IMF are all warning of the damage the trade war is causing to the global economy. So, there is a major focus on ending the tariffs and repairing global trade. If talks falter once again, it will be very damaging for investor confidence. In fact, it will likely leading to a period of risk aversion across markets.

Technical Perspective


The rally in SPX500 over the last two weeks has seen price breaking out to fresh, all-time highs. However, with the index is currently testing the top of the local bullish channel, we could see some short-term correction.

The 3021.82 level will be the key zone to watch. While price holds above there, further upside is likely. However, back below there and focus will shift to the 2939.71 level with the rising channel low in the vicinity also.

About the Author
“John Benjamin Resident Analyst at Orbex. John has over 8 years of experience specializing in the currency markets, tracking the macroeconomic and geopolitical developments shaping the financial markets. John applies a mix of fundamental and technical analysis and has a special interest in inter-market analysis and global politics.” [space height="10"] At Orbex, we are dedicated to serving our clients responsibly with the latest innovations in forex tools and resources to assist you in trading. Please Director at Visit our site for more details.

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