The Asian financial markets were rather muted on Thursday after the trade deal between China and the United States failed to address some uncertainties. While the overall agreement is seen as a positive step, there remains differences. This is worrying Asian traders today.
Yesterday, the United States and China signed the “Phase One” trade agreement. This deal will roll back some existing tariffs immediately, but others will stay in place for at least ten months.
The tariffs that will remain in place are the 25 percent tariffs on a $250 billion in Chinese industrial goods.
In Japan, the Asian benchmark, the Nikkei 225 was up fraction of a percent by the afternoon. In Tokyo, the broader Topix index was down a fraction of a percent.
In South Korea, the Kospi composite index tacked on nearly a quarter of percent. Shares of blue chip Samsung Electronics added 1.53 percent. Shares of auto maker Hyundai Motor surged 3.48 percent.
In Hong Kong, the Hang Seng index was up 0.37 percent. On the mainland, in China, the financial indices were struggling.
The Shanghai composite lost 0.3 percent and the smaller Shenzhen composite was virtually flat. The Shenzhen component also traded near the flat line.
Asian Traders closely Study the Phase One Trade Agreement Details
The United States and China have officially signed the “Phase One” trade agreement. China has agreed to purchase more agricultural and energy products from the United States as well as enforce stricter regulations on intellectual property (IP) rights.
China will also open the door for foreign entities to have ownership over Chinese business entities as well as opening their financial system to foreign investment. The United States will not go ahead with new tariffs and will start the review to roll back existing tariffs.
Focus now shifts to the second part of the trade agreement. This part will most likely focus on technology and cybersecurity issues.