U.S. markets soared by over 426.64 points or 1.65% early morning on Tuesday after reports of the U.S. and China negotiating trade matters and delaying tariffs.
On Monday, U.S. markets plunged by as much as 400 points after The People’s Bank of China (PBOC) set its daily midpoint for yuan trading at 7.0211 per dollar, the third consecutive session below the level of 7 per dollar.
Last week, The People’s Bank of China (PBOC) set the official reference rate of the yuan at 7.0039 yuan per dollar, which sparked global economic concerns. In response, U.S. President Donald Trump called China’s move an act of “currency manipulation.”
Many investors and analysts primarily focused on China’s daily move of the yuan, which industry experts noted that it would be a major market driver.
China’s defense in devaluing its currency was in retaliation to Trump’s additional 10% tariff on USD 300 Billion of Chinese goods. The tariffs were expected to begin on September 1st, however, the U.S. Trade Representative (USTR) said that the tariffs will be delayed until December 15th.
The USTR spokesman noted that the delay would be applied to products such as cellphones, laptops, and video games.
A USTR spokesman spoke with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin and held talks with Chinese Vice Premier Liu He and other officials and mentioned that they would speak again within two weeks.
Additionally, global markets were rattled the past several days because of the ongoing protests in Hong Kong, which ultimately caused the Hong Kong International Airport to cancel all departing flights on Monday.
On Tuesday, Hong Kong’s Hang Seng Index plunged by 543.42 points or 2.1% amid continued protests.