Investors hope for trade war ceasefire at G20 summit

MUCH of the attention at the G20 summit in Argentina this week will be focused on the sidelines, rather than the main events. It is there that, after the expected smile and handshake for the cameras, US president Donald Trump will meet Chinese premier Xi Jinping, as the trade war between the two countries grows increasingly rancorous.

There are hopes, however limited, that the meeting between the two leaders in Buenos Aires will result in a calming of tensions which have so far resulted in huge share price drops, most notably in US tech stocks.

The two countries’ game of tit-for-tat tariffs on each other’s goods has rumbled on for months, as Trump tries to fulfil his pledge to help create more US manufacturing jobs. The tariffs have been blamed for a weakening of China’s mighty manufacturing sector, which earlier this month showed a marked slowdown. Three rounds have been imposed on Chinese goods by the Americans, while China has done the same with $110bn of American goods. Trump has threatened to slap tariffs on the remainder of China’s $500bn-plus exports to the US if the disputes cannot be resolved.

Suggestions that the impasse might be resolved have been met by surging stock prices. Earlier this month, Asian shares jumped when reports emerged that Trump wanted to reach an agreement with the Chinese, with the president tweeting that talks were “moving along nicely”.-