Markets react to Trump threats to withdraw China ‘trade-truce’ if issues unresolved

US president Donald Trump has said on Tuesday that he would revert to tariffs if issues with China were not resolved.

Trump and Xi truce-trade might be over

This comes after Trump and Xi agreed at the G20 summit last week, that there would be a 90-day cease-fire, putting a temporary end to the on-going trade conflict.

The US president said he was also open to the possibility of an extension of the trade-truce if all goes well.

But, the halt-promise has its conditions, and would be deemed void if issues were not resolved, as Trump relayed on Tuesday.

“If it is, we will get it done,’” and “But if not remember, I am a Tariff Man.” Trump tweeted.

Market reaction

Trade wars between the US and China have long had their impacts over the financial markets, and Wednesday was no different.

Investors reacted with relief upon ceasefire news last week, when Trump and Chinese President, Xi Jinping agreed to put their differences on hold.

But, the relief didn’t last long, as markets overnight sold-off with doubts quickly coming back, fearing more uncertainty after Trump's twitter rants.

Trump has also said China is supposed to start buying agricultural products immediately and cut its 40% tariffs on US car imports.

While Trump described the deal with Xi as "an incredible deal," a lack of detail from the Chinese side has left investors and analysts wondering where it all stands, especially since Trump has long accused China of unfair trade practices.

IG Market Analyst Kyle Rodda says last night’s jitters, in a macro-sense, were brought- about by a slew of disappointing news.

"The post-G20 rally has been faded, as traders question the longevity and substance behind the so-called deal between the US-China, after several top White House advisers failed to substantiate what outcomes have been agreed upon between the two trade-waring nations." Mr Rodda said.

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