Upcoming Trump-Xi meeting on trade war spurs irrational investor optimism

Cheryl Sanders
November 3, 2018

A telephone call between Presidents Xi Jinping and Donald Trump might have increased the possibility of a truce in the trade war, but the strategic dispute between Beijing and Washington is a long way from being resolved, according to a Chinese government adviser and other observers. "President Xi Jinping also stressed that China-U.S. trade has always been serving as ballast and a stabilizer for China-US relations".

What Happened: U.S. President Donald Trump has asked his Cabinet to draft a possible trade deal with China after a phone call with Chinese President Xi Jinping, Bloomberg reported November 1. We're getting closer to something.

Trump said if the United States could strike a fair deal with China that would open up its market, he would be very willing to do so. "China wants to make a deal".

The U.S. leader has threatened to tax all imports from China unless it addresses "unfair" trade practices.

Trump and Xi, in several reciprocal actions, have in recent months imposed higher tariffs on tens of billions of dollars of exports moving between the two countries, increasing tensions between Washington and Beijing. "China would love to make a deal", Trump told Breitbart at the time.

"The issues driving the China-US trade tensions are complicated and contentious, which makes it incredibly hard to believe that substantive progress was made during this phone call", Boltansky said.

This year, the Trump administration has already imposed tariffs on $250bn in trade with China and is threatening to impose tariffs on all remaining imports from China, which were worth $505bn last year.

The ministry said Friday the two leaders agreed to "strengthen economic exchanges" but gave no indication whether they made any progress on settling an escalating tariff war over Beijing's technology policy.

Xi was quoted as saying after the call with Trump that they had hoped to expand trade cooperation.

Both the United States and China have sought to portray the personal relations between the two leaders as a source of stability in the relationship, and they have refrained from direct criticism of each other.

"Those discussions are moving along nicely", Trump wrote on Twitter after speaking with Xi, five days before USA midterm elections that will determine whether his party retains control of Congress. Trump said that if a deal is not made with China, he could impose tariffs on another $267 billion in Chinese imports into the United States, adding that China's economy had "been hit very hard" by previous USA. tariffs.

Stocks around the world were rallying sharply Friday after news of a potential trade breakthrough between the United States and China seemed to counter the brutal sell-off that characterized markets in October.

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