A currency trader holds a phone at the foreign exchange dealing room in Seoul, South Korea, Thursday, Nov. 7, 2019. Asian stocks are mostly lower after a meandering day of trading left U.S. stock indexes close to their record highs. (AP Photo/Lee Jin-man)

Global stocks turn higher as China says tariff war may ease

November 07, 2019 - 3:38 am

BANGKOK (AP) — Global stocks are mostly higher after a Chinese Commerce Ministry official said Beijing and Washington had agreed to gradually ease tariffs on each other's exports as they reach agreement in trade negotiations.

China and the U.S. are working on a "Phase 1" trade agreement as they seek to ease the tariff war that has threatened world economic growth.

Germany's DAX rose 0.7% to 13,276.71 and France's CAC 40 gained 0.2% to 5,880.92. London's FTSE 100 rose 0.1% to 7,396.65.

On Wall Street, the future contract for the benchmark Standard & Poor's 500 was up 0.4% and Dow Jones Industrial Average advanced 0.5%.

Gao Feng, the Commerce Ministry spokesman, said Thursday that envoys had "agreed to a phased cancellation of tariff increases depending on the progress of negotiations."

He told reporters that if both sides reach a first phase agreement, then based on that deal they will cancel already imposed tariffs proportionately.

Presidents Donald Trump and Xi Jinping agreed last month to resume trade talks aimed at resolving a more than year-long dispute over technology and industrial policy. As part of that truce, they halted further tariff hikes.

Earlier, a Reuters report that the United States and China may delay signing of a "Phase 1" trade deal until December. That sent U.S. shares decisively lower overnight, though the retreat was short-lived.

The target was for Trump and Xi to sign an agreement at a Pacific Rim summit this month in Chile, but that was cancelled due to protests. Despite the upbeat comments Thursday, it is unclear when or if such a deal will be signed.

The U.S.-China trade war has been a top concern for investors since early 2018, and momentum has recently been tilting toward at least a partial agreement.

That, combined with encouraging reports on the economy and corporate profits, have recently propelled U.S. indexes past their prior peaks from July to all-time highs.

Both sides in the China-U.S. standoff have incentives to ease tensions. China's economic growth has slowed under the weight of increased U.S. tariffs. Meanwhile, Trump's chances of re-election likely hinge on the economy. A worsening trade war would sour that.

One thing more certain for investors has been the steady flow of better-than-expected profit reports from big companies. Over the last month, hundreds have told investors how much they made from July through September, and in most cases the declines were not as steep as analysts had forecast.

Benchmark U.S. crude gained 51 cents to $56.86 per barrel in electronic trading on the New York Mercantile Exchange. It gained 12 cents to close at $56.35 per barrel.

Brent crude, used to price international oils, rose 56 cents to $62.30.

The dollar rose to 109.02 Japanese yen from 108.96 yen. The euro gained to $1.1076 from $1.1068.

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