Is Trade War Coming to an End? Trump Says Trade Deal May be Reached in 4 Weeks!

Following the trade talk last week at Beijing, the one held this week at Washington went in a positive direction, having the US President Donald Trump said on Thursday that they were close to a trade deal that could be announced within four weeks, and the tougher points of a deal had been agreed.

“We’re getting very close to making a deal. That doesn’t mean a deal is made, because it’s not, but we’re certainly getting a lot closer,” said Trump. “And I would think with, oh, within the next four weeks or maybe less, maybe more, whatever it takes, something very monumental could be announced.”

 

Chinese delegate, led by Vice Premier Liu He visited the US to continue the trade talk with Robert Lighthizer and Treasury Secretary Steven Mnuchin to end almost a year-long trade dispute between two countries.

According to Xinhua, Liu He said that a new consensus had been reached between China and the U.S. on the text of a trade agreement that they negotiated.

“I hope the two sides’ trade teams can continue working in the spirit of mutual respect, equality, and mutual benefit to resolve each other’s concerns, and finish negotiations on the text of the China-U.S. trade agreement soon,” Chinese President Xi Jinping’s statement to Trump conveyed by Liu He.

 

The US was focusing on intellectual property and theft, wishing to be able to establish a 100% American firm in China without Chinese shareholders or partners, and security of their technology while China mainly wants the tariff to be lifted.

 

Maybank Securities stated in the analysis that it expected the outcome of the negotiations would not get worse and do not think the US would increase the tariff by 25% due to 1) tariff hike did not help the US to reduce its trade deficit, instead, it jumped by 10% YoY, the highest in 10 years at USD 890 billion and affect the industry in a wide range. 2)Trump’s approval rating in Republican-dominated states continued to decline. And 3) Maybank began to see a positive signal from the Chinese side as it is set to buy goods from the US for the long term. However, to take more 4-6 weeks for trade negotiations may force the market to swing and the upside is limited as well.