Steve Bannon Blasts Mnuchin for Botching China Trade Negotiations

Dow Closes Above 25000 As China Trade War Fears Fade

The long-run picture may not be so sunny.

President Donald Trump just did a 180 on trade with China, and steel stocks are under pressure.

Early Monday the president tweeted that, in order to wind down an escalating trade feud between the two countries, China would buy more American products in order to reduce the trade deficit between the two nations.

The agreement came after Trump threatened to impose up to $150 billion in punitive tariffs to lower the trade deficit and combat what he calls Beijing's misappropriation of USA technology.

"Neither side has made significant commitments at this point".

The celebration could prove premature.

"For us, it's strictly been about marketing to China", said Greg Vesey, chief executive of LNG Ltd, which is developing an LNG plant in Louisiana and another in Nova Scotia in Canada. "There is still a high risk of a trade war, even if the timeline to getting there has been extended".

Corn is seen in a field in Morocco, Indiana, U.S. September 6, 2016.

John Vail, chief global strategist at Nikko Asset Management, said that the negatives of a stronger dollar for large multinationals would be outweighed by the fact that big U.S. businesses may be more free to do business in China without fear of tariffs and a trade war.

Threatened U.S. restrictions on Chinese investments in the United States also appeared to be put on the back burner. Real structural change is necessary. It previously said it would retaliate by putting tariffs on United States agriculture products like soybeans.

Dow Closes Above 25000 As China Trade War Fears Fade
Result of US-China talks: Short-term relief, long-term risks

Commerce Secretary Wilbur Ross planned to go to China, Mnuchin and Kudlow said.

U.S. LNG "makes sense from a Chinese point of view as well because they are experiencing very strong demand for gas as part of their efforts to improve air quality, and there are limited options for them", Jason Feer, the head of business intelligence at Poten & Partners in Houston, said in an email.

The dollar rose versus the yen and hit a five month-high against a basket of currencies, after Mnuchin's comments downplaying a trade dispute with China, boosting risk sentiment amid hopes for an easing of trade tensions between the world's two biggest economies.

On Monday, Trump defended his administration's trade tactics on Twitter. "Been there for 20+ years".

Both sides, however, have said there are no guarantees trade tensions are over. Kudlow said the discussions had achieved "terrific progress" aimed at ending "unfair, illegal trading practices".

US Treasuries slipped, lifting yields on the 10-year note one basis point to 3.067 percent, according to Bloomberg.

Not only does China need to offset the trade imbalance with the USA, but it also needs American natural gas.

Lighthizer last summer began investigating Beijing's tactics to challenge US technological dominance.

Last month, the administration proposed tariffs on $50 billion of Chinese imports to protest the forced technology transfers. Trump later ordered Lighthizer to seek up to an additional $100 billion in Chinese goods to tax. The prospect of an escalating trade war has shaken financial markets and alarmed business leaders. So some business groups were relieved by the cease-fire. Stocks are opening solidly higher on Wall Street after trade tensions between the USA and China dissipated. United Technologies grew 2.3 percent and Caterpillar gained two percent.

The president personally demonstrated an appetite for harsher measures, saying at one point that trade wars were "good and easy to win".

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