Sunday, 16 December, 2018

FTSE latest: London share prices PLUMMET amid US-China trade war fears

US President Donald Trump and China's President Xi Jinping attend the G20 summit in Buenos Aires last weekend US President Donald Trump and China's President Xi Jinping attend the G20 summit in Buenos Aires last weekend
Nellie Chapman | 07 December, 2018, 16:07

Asked to confirm US President Donald Trump's statement that Beijing promised to immediately buy American goods, Gao said China would "immediately implement the consensus reached by the two sides on farm products, cars and energy" but said nothing about purchases.

Failure would raise the specter of a major escalation in the trade battle, with fresh US tariff action and Chinese retaliation possibly as early as March.

China has said that Beijing and Washington will push forward with trade negotiations in the next 90 days and it is confident that an agreement can be reached but doubts remain over whether the two sides can resolve their deep differences.

He added that Xi has sought to control the Indo-Pacific region, where the USA previously had significance.

Trump and the Chinese president, Xi Jinping, had reached a temporary truce in their trade war at a meeting over dinner at the G20 in Argentina on Saturday.

On Monday, Kudlow said there was an "assumption" that China would eliminate auto tariffs, not a specific agreement.

"If it is, we will get it done", Mr Trump said in a Twitter post.

Chinese purchases of the goods collapsed after Beijing imposed tariffs on them in retaliation for USA import taxes.

Those 10 percent tariffs were scheduled to ratchet up to 25 percent on January 1 if the USA and China failed to reach an agreement to at least postpone that move.

The ministry's statement came after the USA president, Donald Trump, called himself "a Tariff Man" on Twitter and warned more levies could be imposed on China. The downside for China is that it also needs USA sourced LNG as its insatiable gas demand expands amid Beijing's mandate that gas make up at least 10 percent of its power generation energy mix by 2020, with further earmarks set for 2030.

There are several significant take-aways from this development, including the argument that Trump's hard line, even at times belligerent stance with Beijing, has caused them to blink first, particularly since economic growth in China has already started to feel the brunt of US tariffs, while USA economic growth, though not as robust as a few months ago, is still strong.

Keane also said that the Chinese leader intends to overtake the United States as a global leader in the world.

The two countries have now agreed to a 90-day truce to work out a broader trade deal.

President Xi and his most senior officials are due back in China on Thursday, having visited Panama and Portugal since leaving Argentina.

A Chinese official told Reuters officials were "waiting for the leaders to return" before publicising details.