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Trade Deal Hopes Spark Rally

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The stock market fell drastically at the end of 2018. Some investors feared that a recession was looming. Others were worried about the Federal Reserve raising interest rates again. However, since the crash, the stock market has rallied nearly 20 percent. Most investors are excited that the market is booming again.

The trade conflict between the United States and China may be coming to an end. Both nations recently announced that recent trade discussions were productive. If a trade deal gets reached, many investment analysts predict that the stock market will rally.

Tariffs

One of the main variables in the trade conflict is tariffs. The United States imposed massive tariffs on steel imported from China. The United States also imposed smaller taxes on various Chinese products. In response, the Chinese government imposed duties on American crops. When the tariffs were announced, the prices of several agricultural products collapsed. Many farmers are struggling to survive financially.

Hopes of a Deal

Many economic experts believe that any trade deal must include lower tariffs on American crops. President Trump has indicated that he will not accept a trade deal until the balance of trade returns to normal.

Numerous companies in the United States hope that a trade deal is reached. It is challenging for companies to plan for the future with looming taxes.

Technology

Chinese companies have been accused of stealing technology in the past. Although the Chinese government denies stealing technology, some American companies have asked for additional oversight on Chinese companies. President Trump wants the Chinese government to agree to more trade restrictions surrounding technology products. It will be interesting to see if patent infringement is part of the new trade deal.

Until a trade deal is reached, business owners will struggle planning for the future. Thousands of business leaders have lobbied President Trump to stop imposing additional tariffs on imported products.

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