Wall Street stabilizes after U.S. “Trade war” tensions with G-7 ease

On Wednesday, Wall Street recovered from the recent tensions surrounding its stocks due to recently gained confidence and interest from investors. According to Reuters, the Nasdaq Composite closed the day in a significant, record closing high.

These events have occurred while the current U.S. trade war with other countries has become less intense recently, at least in the context of trade tensions. It was stated that President Donald Trump would meet with French President Emmanuel Macron and Canadian Prime Minister Justin Trudeau, both representing countries that had recently clashed with the U.S. when it comes to trade. The scheduled Group of Seven meeting has given investors more security, since it shows at least some motivation from part of president Trump to negotiate and discuss his recent decisions. Trump has stated that he will not back off from his projected tariffs and, despite this, investors now feel more confident in the American market and the country’s public relations.

The results of this regained confidence have been a rise in the Dow (of 1.4 percent), the S&P 500 (of .86 percent) and the Nasdaq Composite (of .67 percent). This is a significant difference from previous changes in the Dow, which earlier this month decreased 1.6 percent due to trade tensions and Italy’s political landscape at the time. In fact, the Dow reached a seven-month low value during April, which helped finance experts predict economic growth for the mid-year. On the other hand, Comcast Corp and Tesla helped Nasdaq rise significantly, after both announced progress in their company’s projects.

The G-7 U.S. allies have had an intense and decisive reaction to president Trump’s recent actions, especially since they started compromising some of its members’ economies. What involved France and Canada in the conflict was the U.S.’ decision of raising tariffs up to 25% for steel and 10% for aluminum to the E.U., Canada and Mexico, in concern of national security. The country’s  allies stated that said decision “[undermines] open trade and confidence in the global economy.” It is quite uncommon that only one member of the Group is singled out for its policies and procedures, especially when it comes to the U.S. The country had been previously considered as the leader and ambassador of free trade.

The Trump administration’s most concerning announcement, for Wall Street and the global economy, was that of its plans to implant a baffling 25% tariff in 50$ billion worth of Chinese goods. It came after several statements from the U.S. indicating that the “trade war” had been put to a halt, while the negotiations were taking place. Through a public statement, the White House announced that: “The United States will implement specific investment restrictions and enhanced export controls for Chinese persons and entities related to the acquisition of industrially significant technology.” The tariffs were targeted to complicate China’s access to “industrially significant technology” in the U.S. They have been designed as a response to what the White House has described as unfair trade practices from the country.

After the U.S.’ announcement of the planned tariffs, the Chinese Commerce Ministry stated: “Regardless of what measures the US launches, China has the confidence, capability and experience in safeguarding the interests of the Chinese people and its core national interests. China urges the US to move in the direction of the spirit of the joint communique.”

A U.S. delegation was sent to Beijing, in order to discuss how to balance and ease the situation between the countries. Even though the meetings resulted inconclusive when it comes to the tariffs to be implemented, China did state its will to purchase American farm and energy products. Of course, this compromise could be jeopardized by the tariff plan, since China could end up applying harsh trade levies to said products if the U.S. moves forward.