US Extends March Deadline for Trade Truce with China, Injecting Optimism at Markets

By: Yassmine ElSayed

CAIRO, Feb. 25 (SEE) - US President Donald Trump announced that he would delay an increase in tariffs on Chinese goods that was initially planned for early-March.

Washington and Beijing were locked in a tariff fight for months last year, but that battle was put on hold for an initial 90 days — after Trump met Chinese President Xi Jinping in Argentina in December.

In a series of tweets, Trump said: “I am pleased to report that the US has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues”.

He added: “As a result of these very productive talks, I will be delaying the US increase in tariffs now scheduled for March 1. Assuming both sides make additional progress, we will be planning a Summit for President Xi and myself, at Mar-a-Lago, to conclude an agreement. A very good weekend for U.S. & China!”.

According to CNBC, Asian markets on Monday reacted positively to Trump's announcement, but several experts pointed out that an easing in tensions between the two economic giants won't stop a global slowdown that's already happening.

Oil held gains above $57 a barrel as a U.S. move to extend a trade truce with China raised hopes that the world’s two biggest economies would soon resolve their differences.

"I think we need to take a little bit of a step back and take a look at the economic cycle," Paul Kitney, chief equity strategist at Daiwa Capital Markets, told CNBC's "Squawk Box" on Monday. "The downturn is not going away" regardless of how positively current risks — including the U.S.-China trade war and the U.K.'s impending exit from the European Union — are resolved, Kitney said.