Chinese premier meets with Tesla's Musk as trade talks end

Andrew Cummings
January 9, 2019

But what, if anything, can markets expect from the current dialogue, and where do we go from here?

A member of the United States delegation said the two sides would resume talks on Wednesday as they continue their first face-to-face meetings since Trump and Chinese President Xi Jinping agreed to a tariff truce during a meeting in Argentina on December 1.

The United States and China will continue trade talks in Beijing for an unscheduled third day, U.S. officials said on Tuesday amid signs of progress on issues including purchases of USA farm and energy commodities and increased access to China's markets. China aimed to buy at least 5 million tons of American soybeans as part of the truce.

Crude oil prices were up around 1 percent at the start of trading Wednesday through OPEC curbing oil production and with the ongoing trade talks between the US and China generating investor optimism.

China's Foreign Ministry spokesman Lu Kang later told a daily news briefing results will be released soon.

Even while running for president, Donald Trump waged a war of words against China, promising punitive import tariffs to "bring back" jobs to America. "China has the good faith, on the basis of mutual respect and equality, to resolve the bilateral trade frictions".

The temporary trade-war ceasefire came after the two sides imposed import duties on more than $300 billion of each other's goods.

Some observers argue the president is using the threat of tariffs to force China into negotiations, and that a deal can be done.

El Paso, Texas-based Helen of Troy Ltd, a maker of consumer products from OXO kitchen utensils to Braun shavers, cut its sales and gross margin outlooks on Tuesday laid some of the blame on USA tariffs on Chinese goods, which make up 70 percent of the company's cost of products sold.

Official U.S. fuel storage data from the Energy Information Administration (EIA) is due at 1800 GMT on Wednesday.

Washington complains China uses "unfair" trading practices, including the theft of United States firms' intellectual property. Trump tweeted on Tuesday, the latest in a series of upbeat messages from him on the negotiations since both his meeting with Xi and the December market turmoil.

Few details emerged of the trade talks, which were scheduled to run through Tuesday.

Later this month, US Trade Representative Robert Lighthizer is expected to meet with Vice Premier Liu He, President Xi Jinping's top economic aide who is leading negotiations for China, a person familiar with the situation said last week.

Another photo shows a wider view of dozens of officials from each country seated at three long tables facing each other and around the room's borders, significantly more people than those attending previous rounds of U.S.

"The positive news around the trade talks is giving a boost to risk assets - it's what the global economy needs to see", said Chris Scicluna, head of economic research at Daiwa Capital Markets in London. Liu led a previous round of talks in Washington past year that ended in failure, and he's expected to meet chief USA negotiator Robert Lighthizer later this month.

Investors are hoping that this really does signal progress.

Recent reports have claimed negotiators on both sides are making progress as mid-level talks continue in Beijing. "The view, once commonly heard in Beijing, that it could outlast America in a grinding tariff battle has given way to the realisation that, as the country with the huge trade surplus, China has more to lose upfront".

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