Equities

US-China trade war: Back from the brink

The world’s two largest economies have called a trade truce but the combatants are likely to resume hostilities soon. The stock markets’ rally is unsustainable.

China and the United States stepped back from the brink of a full-blown tariff war on Saturday at the Group of 20 G20 summit of major economies in Osaka.

After an impasse of about two months, President Donald Trump and President Xi Jinping agreed to resume trade talks and postpone levying additional tariffs.

In the short-term, the truce is a relief and global stock markets have rallied.

Both sides were playing for high stakes. The US president had threatened to slap new levies on roughly $300 billion of additional Chinese goods in July, extending existing tariffs to cover almost all Chinese imports into the...

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