The U. S. and China could remain locked in an escalating trade war for quite a while, and analysts have low expectations for any progress at a much touted meeting between President Donald Trump and President Xi Jinping at the end of the month.
The U. S. and China could remain locked in an escalating trade war for quite a while, and analysts have low expectations for any progress at a much touted meeting between President Donald Trump and President Xi Jinping at the end of the month.
There had been some expectation that the post-midterm election environment and the upcoming meeting between Trump and Xi at the G-20 in Buenos Aires would provide an improved atmosphere for trade talks to resume. But analysts remain skeptical and say trade tensions could get worse before they get better, with even more tariffs coming in 2019.
Trump said he spoke with Xi last week and China wants to make a deal, but strategists said it still seems that there are no substantive talks and the two sides have not found common ground. Xi, meanwhile, spoke at a conference Monday and while he did not directly mention the U. S. by name, he insinuated that there is a major rift between the two countries.
“I’m glad Trump talked to Xi last week. I think the atmospherics have gotten a little bit better, but frankly I think Trump said that because he knew the market would be pleased, and he wanted to see the markets rally ahead of the election,” said Greg Valliere, chief global strateigst at Horizon Investment. “Xi said something kind of critical over the weekend to indicate we’re a long way away from a deal.”
Xi spoke at the opening ceremony of China’s International Import Expo, an event where China has been hoping to show that it is sincere about boosting imports and elevating its consumer in the global trade arena. But as trade tensions with the U. S. rise, China’s exports have also risen, with the trade gap with the U. S. a record $40.2 billion in September.
“As globalisation deepens, the practices of ‘law of the jungle’ and ‘winner-take-all’ are a narrowing road that leads to a dead end,” said Xi. “Inclusion and reciprocity, win-win and mutual benefits is the widening and correct path.” Xi also said China would support reforms to the World Trade Organization and improve protection for intellectual property, two ideas supported by the U.
