Xi Jinping And Trump Agree To Talk Without Any Roadmap – Market News Updates
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Xi Jinping And Trump Agree To Talk Without Any Roadmap

China and USA are back at it again. Trump has quit talks with China’s Premier Jinping. These talks were held at G20 summit sidelines in Japan. This was exactly what happened at the last G20 summit, held in Argentina, as well. Peter Boockvar of BAG stated that the current tariffs were here to stay while Eurasia Group stated that chances of a trade agreement occurring in 2019 were at 45% only. Trump is in no hurry as he has made it clear that tariffs wouldn’t be reduced in the immediate future. He stated that the US was gaining on China due to the tariffs.

However, the business sector disagrees. Over 600 US companies had requested Trump to scrap additional tariffs, stating that 2 million American jobs would be lost as a consequence. Business groups are anxious and want a deal. Boockvar stated that CEOs were stressed about the current and future imposition of tariffs.

China is refusing to amend its IP laws, which is Trump’s biggest concern. Trump hiked tariffs to around 25% on over $200 billion of Chinese goods after China refused to honor its draft deal commitments. Liu He, the Chinese VP, stated that an agreement which undermined China’s dignity and sovereignty was not acceptable.

Boockvar stated that these IP laws would probably never come into effect. However, Trump is refusing to budge, with US Trade Rep Lighthizer citing this as an issue when China requested an acceptable deal. This puts markets back to square one, along with the additional danger of lower interest rates. Goldman Sachs announced that no significant outcomes came out of meeting.

Trump is likely to put off additional tariffs since the elections are looming close. He needs USA’s economy to gain well for favorable re-election prospects. Ed Yardeni of YR stated that another hike would be a major blunder and disastrous for the economy. He said that if Trump lost the election, then China could renegotiate a completely better deal, which was also why China could hold off on talks.

However, it is inevitable that over $300 billion worth of Chinese goods will face 10% tariff rates at the minimum. Goldman stated that additional tariffs are likely even in a best-case scenario. Boockvar stated that if more tariffs were imposed, it could set off a disastrous global recession.

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