Once again, ‘hope’ is alive, as US equities surge higher on headlines claim Washington is seeking a new round of trade talks with China (just two weeks after the last heralded round of trade talks amounted to a nothing-burger but prompted panic-buying in stocks).
According to The Wall Street Journal, the U.S. is reaching out to China for a new round of trade talks, in an effort to give Beijing another opportunity to address Washington’s concerns over trade issues before the Trump administration implements additional tariffs on Chinese imports, according to people briefed on the matter.
US equities jumped…
WSJ says that senior U.S. officials, led by Treasury Secretary Steven Mnuchin, recently sent an invitation to Chinese counterparts headed by Vice Premier Liu He, proposing another meeting to talk about bilateral trade, the people said. The U.S. side has proposed to have the discussions in the coming weeks and has asked the Chinese to dispatch a ministerial-level delegation for the talks.
New round of China trade talks = funding secured
— GreekFire23 (@GreekFire23) September 12, 2018
A few words of caution: this is (at least) the third such “report” since August that China and the US hope to come up with a working roadmap to reach a trade deal. Meanwhile, the question is not when or if, but who will meet: recent meetings between China and the US which took place amid lower-level personnel achieved nothing. Finally, one should also consider who is leading (or leaking) these reports: while Mnuchin is well known to be for a resumption of better trade relations, trade hawk Navarro has been pushing for a far more hard-line stance with China.
Perhaps the best option is just to wait for Trump to tweet his own thoughts on the matter.
For now, the market likes it, however, and now just U.S. equities. Chinese stocks are spiking…
