The Dow Jones Industrial Average (DJIA) gained ground on Thursday, climbing over 650 points or 1.6% after the Trump administration announced an incoming (but still not signed) trade deal with the United Kingdom (UK). Under the trade deal, most imports from the UK will still see a 10% tariff across the board, but markets are taking the news as a sign that the Trump administration will continue to at least partially walk back its own tariffs over time.

Investors are still hoping for a quick resolution to the escalating US-China trade war that has steep 145% import taxes on most goods from China. However, the odds of a quick resolution to tariffs on China remain low. According to President Trump, he has no interest in walking back steep import fees on Chinese goods, and the Chinese administration has been slow to set up trade talks. Delegates from the two countries are slated to have a preliminary meeting to discuss trade details this weekend in Switzerland. Still, policymakers on both sides have been tempering expectations of immediate progress.

The July 9 deadline for the Trump administration's self-imposed "pause" on its lopsided "reciprocal tariffs" is fast approaching. Markets still have faith that the Trump administration will be able to ink enough trade deals that the damage from stiff import taxes will be minimized. However, progress has remained slow, and despite President Trump insisting several weeks ago that his administration is in trade negotiations with over 200 countries, progress appears to be non-existent. The UK trade deal announced on Thursday remains unsigned and unofficial, with Donald Trump stating that his administration should have it all "very conclusive" in the coming weeks.

Source: Fxstreet