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China confident on U.S. trade pact, Trump cites Xi's 'strong signals'

EconomyDec 05, 2018 09:37AM ET
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© Reuters. FILE PHOTO: U.S. President Donald Trump takes part in a welcoming ceremony with China's President Xi Jinping in Beijing

By John Ruwitch

SHANGHAI (Reuters) - China expressed confidence on Wednesday that it can reach a trade deal with the United States, a sentiment echoed by U.S. President Donald Trump a day after he warned of more tariffs if the two sides could not resolve their differences.

The remarks, by the Chinese Commerce Ministry, follow a period of relative quiet from Beijing after Trump and Chinese leader Xi Jinping reached a temporary truce in their trade war at a meeting over dinner in Argentina on Saturday.

In a brief statement, the ministry said China would try to work quickly to implement specific items already agreed upon, as both sides "actively promote the work of negotiations within 90 days in accordance with a clear timetable and road map".

"We are confident in implementation," it said, calling the latest bilateral talks "very successful".

Trump, in a post on Twitter, linked Beijing's silence to officials' travels and said he thought Xi had been sincere during their weekend meeting to hammer out progress over trade.

"Very strong signals being sent by China once they returned home from their long trip, including stops, from Argentina. Not to sound naive or anything, but I believe President Xi meant every word of what he said at our long and hopefully historic meeting. ALL subjects discussed!" Trump wrote on Wednesday.

The U.S. president a day earlier had said the ceasefire could be extended but warned tariffs would be back on the table if the talks failed and that he would only accept a "real deal" with China.

China's Foreign Ministry referred specific questions to the Commerce Ministry, which is due to hold its weekly news briefing on Thursday in Beijing.

"We hope the two working teams from both sides can, based on the consensus reached between the two countries' leaders, strengthen consultations, and reach a mutually beneficial agreement soon," Foreign Ministry spokesman Geng Shuang told reporters.

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.

The mood has quickly soured, however, on scepticism that the two sides can reach a substantive deal on a host of highly divisive issues within the 90-day negotiating period, and markets continued to slide on Wednesday in part from confusion over the ceasefire's lack of detail.

Failure would raise the specter of a major escalation in the trade battle, with fresh U.S. tariff action and Chinese retaliation possibly as early as March.

The White House has said China had committed to start buying more American products and lifting tariff and non-tariff barriers immediately, while beginning talks on structural changes with respect to forced technology transfers and intellectual property protection.

Sources told Reuters that Chinese oil trader Unipec plans to resume buying U.S. crude by March after the Xi-Trump deal reduced the risk of tariffs on those imports. China's crude oil imports from the U.S. had ground to a halt.

MARKETS DOWN

Global financial markets sank to one-week lows on Wednesday amid the renewed trade concerns, extending Tuesday's slide.[MKTS/GLOB]

U.S. markets were closed on Wednesday to observe former President George H.W. Bush's death, but the effect of Wall Street's turmoil the previous day was felt in Europe and Asia with the benchmark Shanghai stock index (SSEC) closing down 0.6 percent.

"Narrow agreements and modest concessions in the ongoing trade dispute will not bridge the wide gulf in their respective economic, political and strategic interests," Moody's Investors Service said in a report that predicted U.S.-China relations "will remain contentious".

Officials from the United States and a number of other major economies have often criticized China for its slow approach to negotiations and not following through on commitments.

China has said comparatively little about the Trump-Xi agreement after senior Chinese officials briefed the media following the meeting, and U.S. and Chinese accounts of what the deal entails have sometimes differed.

"Officials now face the difficult task of fleshing out a deal that is acceptable to the Chinese but also involves significant enough concessions not to be torpedoed by the China hawks in the Trump administration," Capital Economics said in a note this week, adding that higher tariffs could simply be delayed.

A Chinese official told Reuters that officials were "waiting for the leaders to return" before publicizing details.

President Xi and his most senior officials are due back in China on Thursday, having visited Panama and Portugal since leaving Argentina.

On Wednesday, the Global Times tabloid, which is run by the Chinese Communist Party's main newspaper, said the Trump administration's statements about the deal - including the agreement that China would buy $1.2 trillion in additional U.S. goods - were designed to highlight or even exaggerate facets of the deal that benefited the United States.

"It will be a win-win situation if a deal is realized. But if not, more fights and talks will continue alternately for a longer while. Chinese society should maintain a calm attitude," it said.

China confident on U.S. trade pact, Trump cites Xi's 'strong signals'
 

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Brady Murray
Brady Murray Dec 05, 2018 1:37PM ET
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even with the tariffs the economy is humming big time. 1 percent moved in the market arent a big deal. 10 years ago 800 points was a wreck when we were at 13000. now at 25 800 points isnt so bad.
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Guy Israeli
Guy Israeli Dec 05, 2018 1:12PM ET
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Stocks are about to soar again in the biggest roller-coaster of the year
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Leão Contábil
Leão Dec 05, 2018 11:16AM ET
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kkkkkk it's funny to see so many investors afraid!!!
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Nopparon Ngamsuriyarote
Nopparon Ngamsuriyarote Dec 05, 2018 7:05AM ET
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Does it able to make agreement with in 90 days?
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Alberto Maugeri
Alberto Maugeri Dec 05, 2018 7:05AM ET
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I think they will be able to find a sort of agreement even not 100% thay will make the stock market the highest ever in the first q1 2019 and there will be a big grow in china and us
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Dustin Aaronson
Dustin Aaronson Dec 05, 2018 6:38AM ET
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Obama received zero respect from China, and they laughed all the way to the bank during that time. China's current situation is difficult because they really needed another 10+ years of ridiculous trade surpluses to convert to a service/tech economy and straighten out their nightmare banking/corporate debt mess. Trump has made things very difficult for Xi, and while they have no idea what he's about to do next, they do believe he means what he says. That's something their not used to. When it comes to treaties and tariffs, the US President doesn't need congressional support. The founding fathers had sound reasons for setting it up that way.
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Alberto Maugeri
Alberto Maugeri Dec 05, 2018 6:38AM ET
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They will finalize the agreement within q2 2019...a hige rally in the stock market is coming after such paintfull period
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Shane Gaede
Shane Gaede Dec 05, 2018 1:31AM ET
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ross... nobody knows what'll happen with nut ball in office. honestly, Xi knows trump is under investigation and will most likely be out in 2 yrs or less, so why would Xi make a long term agreement with a toxic negotiator who is unstable and doesn't have congressional support? Paul, you're more right than you know....
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Alberto Maugeri
Alberto Maugeri Dec 05, 2018 1:31AM ET
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China needs this agreement to avoid recession and debt increase.. they cannot least more than 6 months
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Ross Drennan
Ross Drennan Dec 04, 2018 9:52PM ET
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Another pump piece with little more than speculation.
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