And that’s brilliant news for any Briton with money invested in the stock market, which means tens of millions of us.
Company and personal pensions, income drawdown pots and Stocks and Shares ISAs have all staged a dramatic comeback after recent terrifying volatility.
Stock markets had plunged by nearly 25%, wiping tens of thousands off nest eggs and causing sleepless nights for pensioners in retirement or those preparing to stop work.
The turmoil began on April 2, when Trump slapped so-called “liberation day” tariffs on Chinese goods, triggering global market mayhem.
He imposed punitive levies of up to 145% on Chinese imports, prompting Beijing to retaliate with 125% tariffs of its own.
After two days of emergency talks, both sides have agreed to slash tariffs.
The FTSE 100 leapt nearly 1% at the open and Wall Street is tipped to open 3% higher.
It’s a massive contrast to recent gloom.
The spark was a joint statement from the US Treasury and China’s Ministry of Commerce that tariffs would be “mutually and significantly reduced” over the next 90 days.
The US will cut tariffs from 145% to 30%, while China lowers its own to just 10%.
This has been interpreted by the markets as a possible turning point in the long running US-China trade war.
“There’s a swell of confidence at the start of the week,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown. “The FTSE 100 has a spring in its step, with optimism spreading around the globe.”
She added: “Investors now hope the damage from the trade spat won’t be as severe as feared.”
Trump’s change of heart follows fears of a bond market crash while Goldman Sachs forecast inflation could double if the US failed to secure cheaper imports.
Chris Beauchamp, chief market analyst at trading platform IG, said while not a full trade deal, today’s news paves the way for further talks. “That will keep investors happy for now.”
But he also warned stock markets may have jumped too far, too fast and could easily take another tumble. “Investors are content to ride the wave of euphoria, at least for now.”
Kathleen Brooks, research director at XTB, is also wary as markets seek clarity on the deal. “The risk is that the joint statement won’t deliver the detail investors crave.”
Today, we can all breathe a sigh of relief as pensions, drawdown pots and ISAs recover much of their losses.
But with Trump at large, today’s truce could quickly turn into tomorrow’s tantrum.
