Asia Markets Jump After US And China Agree To Renew Trade Talks

(CNN) — Asia stocks rallied on Monday following commitments by the United States and China to resume trade talks.

Tokyo’s Nikkei jumped nearly 1.7%, and South Korea’s KOSPI rose 0.6%.

US stock futures also climbed, after US President Donald Trump said he would hold off on new tariffs on China and said he would lift some restrictions on Chinese tech giant Huawei.

The Dow was up more than 200 points and the Nasdaq, which includes key tech companies, rose by as much as 1.5%.

The S&P 500, meanwhile, was up as much as 1.0%.

Trump on Saturday reversed the US government’s hard line on Huawei, saying at the G20 summit in Japan that “US companies can sell their equipment to Huawei,” as long as the transactions won’t present a “great, national emergency problem.”

The announcement ended a ban on American companies from using Huawei telecom gear. In May, the US Commerce Department banned sales of American-made goods to Huawei without first obtaining a license. US officials have accused the company of working to undermine US national security and foreign policy interests.

Earlier in the weekend, Trump met with Chinese President Xi Jinping to discuss the impasse in the trade dispute, and Huawei — one of the largest smartphone manufacturers in the world —has become a flash point in the battle.

Trump said Huawei was still part of the ongoing trade discussions between Washington and Beijing, but for now, he would move to again allow companies to sell parts to the Chinese firm.

It remains to be seen whether the initial rally will be sustained. Uncertainty about whether a meaningful agreement can be finalized could loom over markets in the second half of the year.

Existing tariffs remain in place and will continue to hit businesses. And the administration’s position on Chinese tech giant Huawei remains murky, which could make the tech sector jittery.

“The temporary agreement does little to resolve the fundamental conflicts over trade issues that broke down talks in May and does not amount to a sustainable solution for Huawei,” wrote analysts at Eurasia Group, a political risk consultancy.

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