European markets lower amid worries over US-China trade truce made on the G-20 summit.
The world’s two largest economies reached a truce at the G-20 summit in Argentina.
But European stocks shifted lower Tuesday, amid rising doubts over whether the world’s two largest economies will be able to resolve their trade differences, according to CNBC.
Europe’s autos sector led the downfall Tuesday losing almost 2.5%, the technology sector fell 1.4% while France’s Faurecia, who equips one in four automobiles in Europe, was the worst sectoral performer, with shares dropping 6.6% after Jefferies cut its target price for the stock.
Sources close to the deal saw the political deal between President Donald Trump and President Xi Jinping on Saturday evening as ahold off between the both sides on imposing additional charges against each other’s goods in the short term.
However, their is confusion over the exact timing of the tariffs cease-fire, souring investor sentiment overnight. CNBC and Reuters reported that one White House official said a 90-day period to resolve lingering Sino-U.S. trade disagreements would start on December 1, whereas White House Economic Adviser Larry Kudlow told reporters it would start from January 1.
The trade war between the United States and China has been a major concern for executives and investors alike. Both countries’ stock markets have tumbled. Companies have faced higher costs.
The US-China ceasefire “creates an off-ramp for de-escalation of the trade war,” Chris Krueger, analyst at Cowen Washington Research Group, wrote to clients on Monday. He said it recalls an adage in Washington: “When on the edge of a cliff, build more land.”
Higher wage and transportation expenses threaten record-high profit margins. And economic growth is projected to slow next year. Some economists are already warning of a potential 2020 recession. New tariffs are the last thing companies need.
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President Donald Trump and Chinese President Xi Jinping met on Saturday at the G-20 summit in Argentina and agreed to a truce in the trade battle between the U.S. and China. The U.S. will postpone its planned increase of tariffs on $200 billion of Chinese products and China will import more American goods. China’s foreign ministry said the nations are working towards an official agreement to resolve trade conflict and stated that the meeting was “very successful.” ___ Major stock market indices in Hong Kong and Shanghai were up more than 2.5% Monday morning after the nations’ truce was announced. ___ Photo: Getty