Wednesday, 23 January, 2019

Trump says 'I think we'll make a deal with China' on trade

U.S. President Donald Trump U.S. President Donald Trump
Nellie Chapman | 04 November, 2018, 14:42

The White House's leading economic adviser has poured cold water on hopes of an imminent trade deal with China, reversing stock market gains that were triggered by bullish comments from President Trump and President Xi on Thursday.

Trump has imposed tariffs on $250 billion in Chinese imports, and has threatened to slap duties on everything else the country ships to the US But that would mean raising prices on billions of dollars' worth of consumer products, a category the administration has so far mostly avoided. We're getting closer to something.

Asian markets enjoyed another rally earlier after Trump hailed positive talks with Chinese President Xi Jinping and a report said he had asked officials to draw up a draft bill ahead of a potential trade deal.

The Chinese president was also quoted as saying that he was willing to meet Trump in Argentina during the G-20 summit.

The United States has targeted $348 billion in Chinese products with tariffs, a move which saw Beijing lashed back with $153 million tariffs USA goods.

Trump said a deal with China would also be good for Beijing.

But Larry Kudlow, Trump's top economic adviser, sounded a more cautious note on CNBC Friday. While Beijing is open to striking a deal that narrows the trade deficit, officials have resisted Trump's other demands - including an end to subsidies for strategic industries, a stop to forced technology transfer and more competition for state-owned enterprises.

Tu Xinquan, a trade expert at Beijing's University of International Business and Economics, said he was sceptical that the Trump administration was truly ready to deal, and that other factors, such as the mid-term congressional elections, could be driving statements from the administration.

Bloomberg reported on Friday that Trump wants to reach a trade agreement with China at the G20 meeting.

During Thursday's phone call, Xi also said he hoped the United States and North Korea will push for denuclearisation of the Korean peninsula to ensure regional stability. "We're not on the cusp of a deal". We talked about many subjects, with a heavy emphasis on Trade.

The Trump Administration also has taken action to hit the Chinese semiconductor industry, indicting 2 companies accused of stealing trade secrets and banning United States software and equipment exports to 1 of them.

"The stock market is focused on tariffs and they believe that increased tariffs are going to hurt the economy", said Mike Rask, director of trading at Hodges Capital in Dallas.

"There is a long way to go" on negotiations, the United States official said, according to the tweet.

"We will see what happens at the G20 and with Liu's talks, but I am not optimistic that anything momentous will come out of this", Zimmerman said.