Asia markets rise after US and China agree to trade truce

Asian markets rose after the presidents of China and the US reached a temporary truce in their trade war.

At the G20 summit, Donald Trump and Xi Jinping agreed to halt new trade tariffs for 90 days to allow for talks.

An escalating trade war between the world’s two largest economies has weighed on markets generally.

The US and China have imposed billions of dollars of tariffs on one another’s goods, posing risks to global trade and the world economy.

In China, Hong Kong’s Hang Seng index and Shanghai Composite were up more than 2% in early trading, while Japan’s Nikkei 225 rose more than 1%.

“I do not think market consensus is looking for very significant progress, this is a temporary truce,” Masamichi Adachi senior economist at JP Morgan in Japan said.

“Many people suspected that there may be a more disastrous outcome, this is definitely a relief.”

The US and China have been embroiled in a trade war this year which has seen the US hit China with tariffs on $250bn (£195.9bn) worth of goods since July, and China retaliate with duties on some $110bn of US goods over the same period.

Stakes were high at a meeting between President Trump and President Xi at last week’s G20 meeting in Argentina.

Failure to achieve a ceasefire would have seen tariffs on $200bn worth of Chinese goods rise from 10% to 25% at the start of next year, and would have opened the way for tariffs on additional Chinese goods.

Hopes of a breakthrough at the G20 had been undermined right before the meeting by comments from the US president.

President Trump said last week he was likely to go ahead with a planned tariff hike and reiterated his threats that the US could impose tariffs on the remaining $267bn of Chinese imports into the country.