Published: Fri, September 06, 2019
Money | By Ethel Goodwin

China trade talks back on; October meeting now expected in Washington

China trade talks back on; October meeting now expected in Washington

Markets have whipsawed up and down on seemingly every word uttered - good or bad - about the ongoing trade war between the world's two largest economies. Some people close to the talks say one option would be for the cut levies on industrial parts that are not exclusive to the auto sector but can also be used in other applications, such as farm machinery.

"The strong United States data is the main part of the latest turn in markets as they are key factors impacting equities and U.S. yields, therefore determining how long this "risk on" phase will last", said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo. He adjusted the estimate August 23 to "anywhere from 30 to 50 years". "Both sides face the choice" of whether to continue the lose-lose situation or to reach a deal with compromise from both sides, it said.

The Dow and the broader stock market rallied sharply on Thursday, on track to log another day of gains on Thursday after U.S. and Chinese officials said they will resume trade talks. Trump had lashed out at Beijing in past months, frustrated by its failure to follow through on purchases of USA farm products that he said were agreed in his meeting with Chinese President Xi Jinping in June. The news comes just days after China announced it had filed a lawsuit with the World Trade Organization (WTO) on Monday (Sept. 2), the day after the newest tariffs went into effect.

Washington plans to increase the tariff rate to 30% from 25% on $250 billion worth of Chinese imports from October 1.

On Sunday, Washington began imposing 15% tariffs on an array of Chinese imports, mostly consumer products, while China began placing duties on USA crude oil.

Chinese leaders will have a packed schedule this month, gearing up for National Day celebrations scheduled for October 1. China and the United States on Thursday agreed to hold high-level trade talks in early October in Washington, according to the Chinese commerce ministry.

On Sunday, Washington began imposing 15% tariffs on an array of Chinese imports, while China began placing duties on United States crude oil.

Washington could agree, as a sign of goodwill toward Beijing, to delay the 5% tariff increase, and possibly the 15% tariffs due to begin in December, analysts say.

He has also claimed that China is being forced back to the negotiating table because of the country's slowing economy. That could serve as the basis for retaliation against USA companies for action against Huawei.

It could also revoke orders for airplanes built by Boeing Co, the No. 1 US exporter. At one point, President Trump ordered American companies to leave China.

One of the biggest USA complaints is that China has used coercion and outright theft to systematically obtain American intellectual property and trade secrets and advance its standing in many high-technology industries.

USA officials argue that makes it hard for US companies to compete on a market-driven basis. "They don't want to look like they're not willing to engage. Meanwhile, the trade war is worsening troubles in the Chinese economy". USA lawmakers are writing bills that further limit visas, banning students with ties to the Chinese military. Trump has warned that if he is re-elected, China will face a tougher USA negotiating stance.

Like this: