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Trump says China trade deal coming, Beijing calls for resolution of dispute

EconomyAug 26, 2019 05:11PM ET
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© Reuters. G7 summit in Biarritz

By Jeff Mason and Yawen Chen

BIARRITZ, France/BEIJING (Reuters) - U.S. President Donald Trump on Monday predicted a trade deal with China after positive gestures by Beijing, calming global markets that have been roiled by new tariffs from the world's two largest economies.

Trump said after a G7 summit of world leaders in Biarritz, France, that he believed China was sincere about wanting to reach a deal, citing what he described as increasing economic pressure on Beijing and job losses there.

Chinese Vice Premier Liu He, who has been leading the talks with Washington, said on Monday that China was willing to resolve the trade dispute through "calm" negotiations and opposed any increase in trade tensions.

Trump cited Liu's comments as a positive sign, underscoring his seniority, and repeated his assertion that Chinese officials had contacted U.S. trade counterparts overnight and offered to resume negotiations, an assertion that China declined to confirm.

"I think they want to make a deal very badly. I think that was elevated last night. The vice chairman of China came out, he said he wants to see a deal made," Trump told a news conference with French President Emmanuel Macron.

"The longer they wait, the harder it is to put back, if it can be put back at all. I don't think they have a choice."

The trade war between the world's two largest economies has damaged global growth and raised market fears the world economy will tip into recession.

Macron said an agreement would help dispel uncertainty that has been weighing on global markets. He said Trump had told other G7 leaders that he wanted to strike a deal with China.

The upbeat tones soothed global markets, sending U.S. stocks higher and bolstering the U.S. dollar, which had fallen to a 2-1/2-year low against the Japanese yen earlier.

The S&P 500 .SPX gained 31.27 points, or 1.10%, to close at 2,878.38, while the dollar index .DXY reversed course to trade higher, last rising 0.4%.

The Chinese yuan, which had fallen to an 11-year low in the onshore market and hit a record low in the offshore market, pared losses. In the offshore market, the Chinese yuan CNH= was last down 0.5% at 7.1684 per dollar.

Trump said he was more upbeat about the prospects for an agreement with China than in the recent past, and signaled that Washington could also reach a trade agreement with Brussels that averted car tariffs on car imports from Europe.

The U.S. leader also downplayed the prospect of new U.S. tariffs on autos imported from Japan, after a trade deal reached by the largest and third-largest economies on Sunday.

CONTRADICTION? NO PROBLEM!

Asked whether his contradictory statements on trade matters had fueled global market uncertainty, Trump appeared to defend the practice and said it had served his interests well.

"Sorry," he said, flatly. "It's the way I negotiate. It's done well for me over the years, and it's doing even better for the country, I think."

Days after referring to President Xi Jinping as an enemy, for instance, Trump on Monday heaped praise on his Chinese counterpart in separate remarks, alternately calling him a "great leader" and a "brilliant man."

In Beijing, Foreign Ministry spokesman Geng Shuang said he had not heard that a phone call between the two sides had taken place. China's Commerce Ministry, which typically releases statements on trade calls, did not respond to a request for comment.

When pressed on whether a call had taken place, Trump emphasized Liu's comments. U.S. Treasury Secretary Steven Mnuchin said there had been contact between the two sides but declined to say with whom.

Hu Xijin, editor of the state-controlled Global Times newspaper, tweeted: "Based on what I know, Chinese and U.S. top negotiators didn't hold phone talks in recent days. The two sides have been keeping contact at technical level, it doesn't have significance that President Trump suggested. China didn't change its position. China won't cave to U.S. pressure."

TARIFFS

The increasingly bitter U.S.-China trade war worsened on Friday with both sides leveling more tariffs on each other's exports.

Trump announced an additional duty on some $550 billion of targeted Chinese goods, hours after China unveiled retaliatory tariffs on $75 billion worth of U.S. goods.

On Sunday, the White House said Trump regretted not raising the tariffs even more. But Trump also appeared to back off of his threat to order U.S. companies out of China.

Liu, Xi's top economic adviser, said at a conference in southwestern Chongqing: "We are willing to resolve the issue through consultations and cooperation in a calm attitude and resolutely oppose the escalation of the trade war.

"We believe the escalation of the trade war is not beneficial for China, the United States, nor to the interests of the people of the world."

The Chinese Foreign Ministry spokesman said China would retaliate if Trump enforced the latest U.S. tariffs.

The two sides were due to meet in September in Washington, but no specific dates have been released.

The United States accuses China of economic sins including intellectual property theft, currency manipulation and forced technology transfer by U.S. companies to their Chinese partners as a requirement for doing business in China. China denies the U.S. allegations.

Beijing and Washington were close to a deal last spring but U.S. officials said China backed away from an agreed text over a reluctance to change laws to address U.S. complaints.

The trade war has affected businesses all over the world and disrupted supply chains. Trump has urged U.S. companies to move their operations out of China, but it was not clear how or whether his efforts to order such a move would work.

He said on Monday that if a deal emerged, U.S. companies should stay in China or leave if it did not.

Liu said: "We welcome enterprises from all over the world, including the United States, to invest and operate in China."

Mnuchin said Trump could order companies out of China under the International Emergency Economic Powers Act if he declared a national emergency.

Macron and German Chancellor Angela Merkel, who met with Trump at the G7, both said it was in everyone's interest for China and the United States to reach a deal. Germany's economy, which is heavily dependent on exports, is facing a recession, according to some economists.

Trump says China trade deal coming, Beijing calls for resolution of dispute
 

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Robert Merrill
Robert Merrill Aug 27, 2019 2:06AM ET
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one last final note on the subject..if china cuts the biggest importer of rare earths via products or general consumption..then they would be pointing the gun at themselves..and on top of that give trump a reason to cut the hand that feeds it by pulling business out of china..do you see russia venezuela iran or north korea having the money to buy these services or products? would they even want the tools for mass riots in the hands of the population?
Robert Merrill
Robert Merrill Aug 27, 2019 2:06AM ET
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hence exploration to the different continents using chinese sided deals..to boost there lacking domestic rare earth industry in mining..but the missing piece of the puzzle is first who really controls the seas..that would be the U.S. ..second..rare isnt really rare its eveywhere the u.s. was smart to apply other countries to supply there needs so the u.s. didnt use domestic unmined reserves..but overall its time china starting trading fairly and not bully smaller nations into giving up reserves from infustructure investment
Kevin Avila
Kevin Avila Aug 27, 2019 1:46AM ET
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So much hate spewing on here pretty crazy... All i would really like to see is everyone get along. But in all actuality it can only come from the Chinese first. Its that easy. Give the guy what he wants and we all win. Im not agreeing to the way its being handled, but its the truth. All he asked for were fair trading practices and China gave him... DJT the middle finger... What did they think was going to happen?
Adamo Nals
Adamo Nals Aug 26, 2019 7:31PM ET
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Cant Believe traders fall for this. We’ve barely had to pull back and there’s barely any headwinds or bad priced into the market. So easy to see
Adamo Nals
Adamo Nals Aug 26, 2019 7:30PM ET
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Its called buying vxx calls spy puts and cash. Period. You think at almost ath s we are ripping higher or odds at 99.9% we test 2700. Come on people. Wake up. Its Healthy to do this clean out some air in the market. It’s trading at 19 X forward. It’s not cheap
Dunn Ng
Dunn Ng Aug 26, 2019 6:41PM ET
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mouse and cat are playing game
Tumelo Mash
Tumelo Mash Aug 26, 2019 3:31PM ET
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The best thing to do with all this lies and uncertainty this week and onwards is to wait... No positions opened. Wait like a pro... One of the 3 is gonna blink first. Trump, China or The Fed. Then we unload positions heavily in safe assets protect our capital then wait again... Till this ****Trade war settles down. I cannot be checking my Twitter 46 times a dayIt's unhealthy
Rui Bandarra
Rui Bandarra Aug 26, 2019 3:31PM ET
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Exactly
Hank Williams
Hank Williams Aug 26, 2019 1:31PM ET
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And after all you are the chosen one.
Hank Williams
Hank Williams Aug 26, 2019 1:28PM ET
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And I am sure it will be a Great Deal! Because you say.
Tumelo Mash
Tumelo Mash Aug 26, 2019 12:15PM ET
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How long does Trump think his gonna keep this up. I wonder what will happen after Dec 15 when tariffs have slown down global growth so much no monetary policy will be effective. Trump has to come up with a winning strategy he is running out of play moves he is even lying and making us unwind unnecessary positions.
Tumelo Mash
Tumelo Mash Aug 26, 2019 12:09PM ET
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One day the market will crash... One day one of the will pick up tariffs to 50% one day Trump will fall. One day the great recession that will be worse than recession itself one day gold will touch $2000 one day I say one day
Paul Manefee
Paul Manefee Aug 26, 2019 11:32AM ET
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Americans, we have to stand up and fight against this Chinese authoritarian regime, people in Taiwan knows that Chinese CCP is a mafia government, Hong Kong people knows this and they are fighting for their future and we Americans should rise above and protect our future as well
Yisheng Zhao
Yisheng Zhao Aug 26, 2019 11:32AM ET
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hehe
Al Vlaj
alvlaj Aug 26, 2019 11:32AM ET
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Agreed, but DJTs methods are uneffective and backwards. The best solution was TPP, but Trump left that out of spite. His base acts like he’s the first to recognize the problem. What do you think Obama was pushing so hard on TPP for?? We would have WON against China by now if Trump didnt back out. How doesnt his base see that???No logical economist or business person would want to do what he is doing. Its already been tried and led to the Great Depression. There is a problem with China, yes. But Trump acknowleding a problem and implementing a crazy solution are two different things. His base is blinding following this solution, but its his base that will get creamed the most.
David Wong
David Wong Aug 26, 2019 11:32AM ET
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Paul ... please stay away from Fox News and mainstream media. They got you brainwashed.
Paul Manefee
Paul Manefee Aug 26, 2019 11:27AM ET
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Americans, don’t believe the China trolls on this board, they are hoping to use the Western media to shake American investors confidence and pressure our President to cave. Their economy is a lot worse than you think, look the exchange rate, they are heading toward 7.2-7.5, the foreign capital will soon be leaving since profits made in China are significantly diluted by FX rate, ( China CCP has hijacked them right now with capital control) , goods coming in are also cheaper as well, Do not believe the China trolls on this board
Boris Chan
Boris Chan Aug 26, 2019 11:27AM ET
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the irony in this statement
Linda Liao
Linda Aug 26, 2019 11:23AM ET
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we will see what is going on serveral days later. On 9/1 if both sides not add new traiffs, then that means they get deals temporarily. if add, then next round is on the way. Think about what is happening in HongKong, I don't believe there will be happy ending for this trade war.
Linda Liao
Linda Aug 26, 2019 11:23AM ET
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BTW, if you guys have Fedex stocks, be careful. China will publish their list of untrusted entities soon like what US did to Huawei. The possbility is greater than 90% that Fedex will be on that list. Get your money back before it is too late.
android download
android download Aug 26, 2019 11:15AM ET
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everything was running good. until Trump came into picture. unwanted fights with all countries. no other US president has done this
android download
android download Aug 26, 2019 11:14AM ET
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both (China and US) Country leaders are not bothered about their people and other countries people. their egos are ripping their people's skin.
brad merck
brad merck Aug 26, 2019 10:42AM ET
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lol , trump is big trader , S&P down and gold up 1600
taylor fucci
taylor fucci Aug 26, 2019 10:33AM ET
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Trump tweets = fake news; do people really believe that the very next business day after China retaliated after initiating additional tariffs that they would claim defeat and come crawling to trump to make a deal?
Hank Williams
Hank Williams Aug 26, 2019 10:23AM ET
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Really giving realtor a bad name showing their techniques.
Ng Zen ng
Ng Zen ng Aug 26, 2019 10:10AM ET
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Shepherd and sheep
Hank Williams
Hank Williams Aug 26, 2019 9:47AM ET
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And every man women and child is going to be given a $10 million dollar gold egg.
Suman Jutur
Suman Jutur Aug 26, 2019 9:36AM ET
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Trump is a liar and markets just fall for his lies again and again.
Bruno Bree
Bruno Bree Aug 26, 2019 9:36AM ET
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América first! Trump correct! China will not win!
Arief Kirniawan
Arief Kirniawan Aug 26, 2019 9:36AM ET
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That's INSANE TRUMP you will start the WORLD WAR 3 upside at you havd.World will become blame TRUMP is started Economy War,Trade War,Recession Global and in the end will started as WORLD WAR 3 began from TRUMP...TRUMP take very action dangerous policy now,it's each piece mess up your policy will end with open world war 3 started from US Prisedent Donlod J TRUMP
Tubsy SkinntFinger
TubsSkinnyFinger Aug 26, 2019 9:31AM ET
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Heard the same *****before, during and after G20. He calls China the enemy and now he wants a deal... The Chinese will outlast Trump.
Paul Tran
Paul Tran Aug 26, 2019 9:29AM ET
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yea right... China plays Trump like a puppet...
Not Likely
Not Likely Aug 26, 2019 9:23AM ET
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like clockwork, all the Chinese communist government trolls spamming the comment sections of trump and trade articles....
Leo I am
Leo I am Aug 26, 2019 9:23AM ET
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u must be representating crazy trump? what kind of statement you are making. shame on you
Arief Kirniawan
Arief Kirniawan Aug 26, 2019 9:23AM ET
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not from chinese only,TRUMP have made more trouble on his leadership so many country,Did you see TRUMP trade war with INDIA,TURKEY,PAKISTAN,and will continue come trade war UNITED EUROPE Country,it's not only CHINA but so many country he did with trade war.TRUMP Take Action from war.He is dangeroius man will fail inttto World War 3 tthat he started now.
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