China con­fi­dent of agree­ing US trade deal de­spite Trump's com­bat­ive stance

The Guardian Australia - - World News - Guardian staff and agen­cies

China has said that Beijing and Wash­ing­ton will push for­ward with trade ne­go­ti­a­tions in the next 90 days and it is con­fi­dent that an agree­ment can be reached but doubts re­main over whether the two sides can re­solve their deep dif­fer­ences.

The com­merce min­istry, in a brief state­ment on its web­site, also said China would work to im­ple­ment spe­cific is­sues al­ready agreed upon as quickly as pos­si­ble.

The min­istry’s state­ment came af­ter the US pres­i­dent, Don­ald Trump, called him­self “a Tar­iff Man” on Twit­ter and warned more levies could be im­posed on China. The slew of Trump tweets prompted mar­kets to fall as in­vestors lost faith in a de­tente be­tween the two na­tions.

The Dow Jones in­dus­trial av­er­age lost close to 800 points – just over 3%. Other mar­ket in­dexes also fell sharply: the S&P 500 lost 3.2% and the Nas­daq dropped 3.7%.

Mar­kets in the Asia-Pa­cific fol­lowed suit on Wed­nes­day with Tokyo and Seoul both down 0.8%, and Aus­tralia’s bench­mark ASX200 in­dex fall­ing 1.35%.

Trump and the Chi­nese pres­i­dent, Xi Jin­ping, had reached a tem­po­rary truce in their trade war at a meet­ing over din­ner at the G20 in Ar­gentina on Satur­day.

The threat of fur­ther es­ca­la­tion in the trade war be­tween the world’s two largest economies has loomed large over fi­nan­cial mar­kets and the global econ­omy for much of the year, and in­vestors ini­tially greeted the cease­fire with re­lief.

But the mood has quickly soured on scep­ti­cism that the two sides will be able to reach a sub­stan­tive deal on a host of highly di­vi­sive is­sues within the 90-day ne­go­ti­at­ing pe­riod that was agreed. Fail­ure would raise the spec­tre of fresh US tar­iff ac­tion and po­ten­tial Chi­nese re­tal­i­a­tion as early as March.

The com­merce min­istry said Chi­naUS trade and eco­nomic dis­cus­sions were “very suc­cess­ful”. The state­ment did not men­tion Trump or Xi, how­ever the state news agency Xin­hua later said the min­istry state­ment was hail­ing their meet­ing.

“We are con­fi­dent in im­ple­men­ta­tion … The eco­nomic and trade teams from both sides will ac­tively pro­mote the work of ne­go­ti­a­tions within 90 days in ac­cor­dance with a clear timetable and road map,” it said.

“The Chi­nese side will start with im­ple­ment­ing specifics on which there is al­ready con­sen­sus, the faster the bet­ter.”

Trump, via Twit­ter, threat­ened to place “ma­jor tar­iffs” on Chi­nese goods im­ported into the United States if his ad­min­is­tra­tion is un­able to reach an ef­fec­tive trade deal with Beijing.

China has said com­par­a­tively lit­tle about the Trump-Xi agree­ment af­ter se­nior Chi­nese of­fi­cials briefed the me­dia fol­low­ing the lead­ers’ meet­ing, and there have been some dif­fer­ences be­tween US and Chi­nese ac­counts of what the deal en­tails.

A Chi­nese of­fi­cial told Reuters of­fi­cials were “wait­ing for the lead­ers to re­turn” be­fore pub­li­cis­ing de­tails. Xi and his most se­nior of­fi­cials, in­clud­ing the com­merce min­is­ter and the coun­try’s two top diplo­mats, are in Por­tu­gal, and due back in China on Thurs­day.

Fi­nan­cial mar­kets tum­bled as a re­sult of the un­cer­tainty.

The sell­ing “has all the nasty hall­marks that traders typ­i­cally call the per­fect storm,” said Stephen Innes, head of Asia-Pa­cific trade at OANDA. He said in­vestors “are prob­a­bly left feel­ing duped, tricked and maybe even snook­ered by some ill-ad­vised back­slap­ping com­ments post G20”.

“While trade war is cer­tainly the num­ber one driver of global risk sen­ti­ment, the cur­rent melt­down is mor­ph­ing into a Hy­dra with fa­mil­iar points of ir­ri­ta­tion - trade, (Fed­eral Re­serve), Brexit, Italy, global growth com­ing to a head,” he added.

Reuters con­trib­uted to this re­port

Pho­to­graph: Pablo Martínez Mon­siváis/AP

Trump and Chi­nese leader Xi Jin­ping at a meet­ing dur­ing the G20 sum­mit in Ar­gentina.

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