The European Union and China have agreed to a preliminary trade deal aimed at addressing the significant trade imbalance between the two economic giants. The agreement was reached in Beijing following two days of high-level talks between top trade envoys.
The initial deal includes measures that could reduce Chinese exports of electric and plug-in hybrid vehicles to the EU by as much as 50 percent, according to the European Commissioner for Trade. It also reportedly includes lower tariffs for some European goods and provisions to stabilize supply chains for rare earth materials. The move is intended to de-escalate growing trade tensions and manage the increasing presence of Chinese automakers in the European market. The agreement now requires formal approval from the leaders of the 27 EU member states.
Market Impact: U.S. equity futures saw gains during the after-hours session. S&P 500 Futures (ES) were up +0.64%, Nasdaq Futures (NQ) increased by +0.50%, and Dow Futures (YM) rose +0.94%.