Stocks are apparently a bit troubled by the development in US-China trade negotiations. When asked whether he will meet Chinese President Xi Jinping this month to seal the trade deal, Trump bluntly said “No”, shaking his head. He went further and said “Not yet. Maybe. Probably too soon. Probably too soon” for a meeting next month.
The current trade-war ceasefire will end on Mar 1 and for now, US maintains the plan to impose tariffs on USD 200B in Chinese goods from 10% to 25% after that. While Trump’s comment triggered concerns of further escalation in trade war, it’s seen not as the most likely scenario.
US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will travel to Beijing to resume trade talks next week. Trump’s comment could be just a negotiation tactic. And, more importantly, Trump has scheduled to meet North Korean leader Kim Jong-un in Vietnam on February 27-28. It’s easy for him to travel from Vietnam to China after that. And last but not least, the cease-fire deadline can be extended if there is enough progress in the negotiations.
