When reports emerged last week of a low-level Chinese delegation coming to meet with members of the Treasury department ahead of what the WSJ described would be a November trade summit in the US, stocks spiked and yields ran up (they have since tumbled with the 2s10s yield curve collapsing to just 20 basis points) on hopes that the long-running trade feud between the US and China may finally be coming to an end.
Skeptics laughed and said that after three rounds of failed trade talks, the fourth one would be no different.
The skeptics were right because after the conclusion on Thursday of the second day of the closely watched trade talks between the U.S. and China, there was “no major progress” according to Bloomberg, with the stage once again set for further escalation of the trade war between the US and China.
Worse, according to the Bloomberg source, not only are no further talks scheduled at this point but the Chinese officials have reportedly raised the possibility that no further negotiations could happen until after November’s mid-term elections in the U.S.
The White House issued a statement which said the countries “exchanged views on how to achieve fairness, balance, and reciprocity in the economic relationship, including by addressing structural issues in China” identified by the U.S. in an investigation into Chinese intellectual-property practices. The Chinese commerce ministry was even more terse, stating that two nations had “constructive, candid”communication, and will keep in touch about the next steps.
Translation: nobody was willing to compromise by even an inch.
Here’s what happened according to the Bloomberg source: the U.S. Treasury presented a revised version of the “provocative” list of demands presented by the Trump administration when the two sides had their first high-level meetings in May. The Chinese delegation, meanwhile, showed no signs of bringing any significant compromises to the table this week.