The United States and China have reached an historic and enforceable agreement on a Phase One trade deal that requires structural reforms and other changes to China's economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange. The "Phase 1" agreement means that the U.S. won't impose new tariffs on Chinese goods that had been scheduled for Sunday. In addition to canceling the new tariffs, the U.S. also agreed to reduce certain existing import taxes on about $112 billion in Chinese goods from 15% to 7.5%. In return, Trump said that the Chinese have agreed to "massive" purchases of American farm and manufactured products as part of the initial deal. The president said a so-called phase-two deal will be discussed immediately rather than after the 2020 presidential election. The two major economies plan to sign the partial accord in the first week of January.
Meanwhile, investors were also digesting U.K. Prime Minister Johnson's Conservative Party swept to a landslide victory in elections on Thursday, securing a strong majority in Parliament. The convincing win gives him support to secure a Brexit deal and negotiate a new relationship with the European Union next year. Brexit concerns have been cited as one lingering headwind for global investors.
Technology companies, which rely heavily on China for sales as well as parts, led the gainers, outweighing losses in banks, energy stocks and elsewhere.
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