One of the biggest things that have been affecting the global share market over the past couple years has been the trade war between the US and China.
There has been talk for the past few weeks that a trade deal could be getting close, which is one of the main reasons why Vanguard MSCI Index International Shares ETF (ASX: VGS) has gone up 7% since 3 October 2019.
International media are reporting that a US and China may be about to announce a deal that avoids previously-announced additional tariffs with President Trump reportedly agreeing to the terms.
This to-be-announced deal will see the US remove some tariffs whilst China will increase purchases of US farm goods.
Indeed, Mr Trump tweeted: "Getting VERY close to a BIG DEAL with China. They want it, and so do we!"
One of the points being reported is that the US could cut its tariff rate by half on around US$350 billion of Chinese goods.
Some sceptics might say that Mr Trump is trying to get a trade deal done to counter the news of his impending impeachment. However, it seems unlikely that any deal will solve the issues that Mr Trump started this trade war about in the first place. Namely, alleged intellectual property theft, access to the domestic China market and Chinese government support for its businesses.
If a true trade deal is announced between the US and China you can imagine that shares like BHP Group Ltd (ASX: BHP), Macquarie Group Ltd (ASX: MQG), Westpac Banking Corp (ASX: WBC), Altium Limited (ASX: ALU) and most other shares would get a very nice boost.
Foolish takeaway
A trade deal is certainly not guaranteed. We're one tweet from the US President against China away from seeing the progress undone, but he has a very big reason to want to get something done.
