Hours before the deadline, Trump signed.
News comes just before the deadline — Trump will extend the tariff deadline on China by 90 days.
CNBC reports that a White House official stated that Trump has signed an executive order to delay the deadline for imposing high tariffs on Chinese goods by another 90 days. The order was signed just hours before the expiration of Trump's tariff suspension period.
Additionally, Bloomberg cited sources saying that the text of the order has not been immediately released, and it is currently unclear whether it includes any other modifications to U.S. trade policy or the terms of the agreement.
First, from the timing of the announcement, it aligns with our analysis from last Friday. Although it is good news, it is a change that occurred without prior notice, which means that uncertainty has always existed from the market's perspective.
If it’s bad news (no further delays), then the results may be known over the weekend. If it’s good news, we may have to wait until the last moment (Monday night or Tuesday morning).
Second, after this news was released, there was not much fluctuation in the U.S. stock market, the dollar, or the renminbi; traders had long regarded the delay as a baseline scenario. In the future, only bad news will cause significant fluctuations. The market impact of bad news will be greater because of insufficient preparation. Therefore, the short-term risk balance actually becomes weaker — limited upside potential and significant downside potential. However, the Chinese stock market may perform better today.
Third, extending by 90 days means until early November. There may be a high-level meeting between both sides in October, and if an agreement can be reached, this will be the best timing, leading to a wave of more genuine risk appetite in the market.
U.S. Treasury Secretary Mnuchin has stated that both sides have the foundation to reach an agreement, and he is 'optimistic' about the future negotiation path.
Mnuchin's 'optimistic' statement is a signal, but I prefer to see it as part of managing the negotiating atmosphere rather than a clear trading signal.
The main event is tonight, when the U.S. will announce the July CPI data — this is also a major test for Trump, who just fired the head of the Bureau of Labor Statistics, and the market may question the authenticity of this data.
If inflation heats up, the market will think this is just the July data, which does not fully reflect the impact of tariffs. If inflation unexpectedly cools (below expectations), the market will suspect the data is manipulated.
This CPI is unlikely to bring a 'one-sided and sustained' rise.
