China, US Edge Closer to Trade Deal

Trump: Deal as Soon as Four Weeks

U.S. authorities have reported progress in ongoing trade talks with China, in an effort to break escalating tariffs and trade slowdown.
President Donald Trump said that negotiations were progressing well and that a deal could come as early as the next four weeks as some of the toughest issues had been settled.
“This will be a really terrific, very unique deal. This is an epic deal, historic, if it happens,” Trump said, adding that the deal was “moving along nicely” and optimism was “very high.”

Ninth Round of Talks Concludes

Over the weekend, negotiators concluded the ninth round of high-level economic and trade talks, with both sides claiming the talks had been a success.

“The two sides discussed the agreement text on technology transfer, protection of intellectual property rights, non-tariff measures, services industry, agriculture, trade balance and enforcement mechanism, and achieved new progress,” Chinese state news agency Xinhua said.

Last month, the White House dropped plans to add US$200 billion of additional trade tariffs on Chinese exports, marking the first sign that trade tensions between the two countries were easing.

Investors Eye Upside
To date, the U.S. has imposed three rounds of tariffs on Chinese goods, with a total value of more than US$250 billion. The reverberations have been felt across global markets with breakbulk demand slumping in certain sectors.

While no details were disclosed about the negotiations, the White house has been pushing for greater protections for U.S. companies operating in China, particularly around IP theft, Chinese state involvement and enforced partnership with Chinese companies.

If successful, the trade talks could usher an increase in foreign investment in China and the U.S. as investors capitalise on a more robust business environment.

Steel Growth Strong in China

One of the first sectors to be hit was the steel industry after Trump imposed tough tariffs on Chinese steel exports. As a further sign of optimism for the sector, China's steel futures gained more than 3 percent in early trading on Monday, an important signal for related breakbulk activity across multiple sectors.
"The physical prices of steel have also increased over the last few days, driven by the seasonal demand improvement," said Richard Lu, senior analyst at CRU Group.

Photo: Donald Trump and Xi Jinping. Credit: Wikimedia