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Richard Hunter, head of markets at interactive investor, says this week’s talks in London between the US and China “represent progress”, despite the lack of detail about what was agreed:
“Apparently constructive talks between the US and China have put markets on a firmer footing, as investors hope that the worst of the tariff turbulence may have passed.
Details of the framework which has been agreed in principle were patchy and in any event yet to be signed off by both Presidents. Chinese exports of rare earth minerals are likely to have been high on the agenda, although at this stage it has not become apparent what China may have negotiated in return.
“Markets will likely welcome the shift in tone from confrontation to coordination. But with no further meetings scheduled, we’re not out of the woods yet. The next step depends on Trump and Xi endorsing and enforcing the proposed framework.
“It’s important not to mistake this tactical de-escalation for a full reversal of strategic decoupling. The underlying competition around technology, supply chains, and national security remains very much intact. New issues can always emerge, and the real test will be how far this “new old deal” is implemented.”
