Is a harmonious conclusion to the six-month-long US-China trade battle finally within reach? Or this just a ploy to push US stocks higher ahead of an election that will decide which party controls Congress for the balance of Trump’s term?
That’s the question that traders will be asking themselves as they try to suss out the implications of a Bloomberg report claiming that President Trump has asked his cabinet to begin drawing up the terms of a deal following a “long and very good” conversation with Chinese President Xi Jinping on Thursday – the first phone call between the leaders of the world’s two largest economies in months. According to Bloomberg, Trump has asked key cabinet secretaries to have their staff draw up a draft deal that he hopes will signal an end to the trade conflict, BBG’s anonymous sources said. What remains unclear is whether Trump will drop the list of demands that have reportedly been a sticking point in negotiations since the spring. Among those demands are that China scale back state support for its ‘Made in China 2025’ initiative, drop policies that support the siphoning of intellectual property from foreign companies and reduce the country’s trade surplus with the US.