Published: Sat, November 03, 2018
Markets | By Otis Pena

Trump 'Could Pull the Trigger' on Additional Tariffs on Chinese Imports - Kudlow

Trump 'Could Pull the Trigger' on Additional Tariffs on Chinese Imports - Kudlow

"We are not on the cusp of a deal", Kudlow said.

"Opec and other major producers appear to have gotten the message from US President Donald Trump and increased production, but there are still questions on how much will the sanctions actually impact Iranian exports", said National Australia Bank senior forex strategist Rodrigo Catril.

China and the USA, the world's two largest economies, are in a bitter trade dispute.

Trump imposed new tariffs on roughly half of Chinese imports this summer, while Beijing fired back with tariffs on most USA products. In Beijing that was seen as an insult to Xi, who sent a personal emissary to Washington for the negotiations, and cemented a view that Trump's real goal was to thwart China's rise. "I don't think they're ready yet".

Tuuli McCully, head of Asia-Pacific economics at Scotiabank in Singapore, called the news "encouraging". It "likely reflects the fact that businesses in the USA are starting to feel the impact of the trade conflict through higher prices and squeezed margins", she said. However, one can hardly breathe a sign of relief at this point.

Given that tariffs are generally inflationary and bad for economic growth, investors have not been particularly pleased with the idea of a drawn-out trade war - or the possibility of more tariffs.

Although U.S. -China relations have been rocky, Keqiang said he is optimistic both nations can work together in the spirit of mutual respect. Can an agreement stick?

Despite the promise offered by the Trump-Xi telephone call, the level of tension between the two nations was demonstrated just hours after it ended when the USA filed charges against Chinese technology firm Fujian Jinhua Integrated Circuit Co and its Taiwanese partner.

Trump and Xi both expressed optimism about resolving their bitter trade disputes ahead of a high-stakes meeting planned for the two leaders at the end of November in Argentina. "They want to make a deal", Trump said Friday outside the White House.

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"He wants to do it", Trump said of Xi. "We have a new deal", he said adding that the USA is now negotiating with the European Union, which "has absolutely hurt" the United States. The Trump administration this year has already imposed tariffs on $250 billion in trade with China and is threatening to impose tariffs on all remaining imports from China, which last year were worth $505 billion.

"Dollar moderation, the stabilising trade relationship between USA and China and more stimulus from Beijing will be the key ingredients to revive market confidence in Asia".

A key point of contention for the U.S. has been its allegations that China has engaged in widespread intellectual property theft.

"I hope that China and the USA will meet each other halfway and will appropriately handle their differences with mutual respect and equal cooperation", stated the Chinese premier.

Fujian Jinhua Integrated Circuit Co. and Taiwan's United Microelectronics Corp. were indicted along with three individuals, the Justice Department said.

The yuan is continuing to push forward with gains against the greenback as talks of a US-China trade resolution continues to fuel the rally seen in the past two days.

Tu Xinquan, a trade expert at Beijing's University of International Business and Economics, said he was sceptical that the Trump administration was truly ready to deal, and that other factors, such as the mid-term congressional elections, could be driving statements from the administration.

Trump also offered to host a "Western-style" dinner for Xi on December 1, after the G20 leaders' meeting, an invitation that Beijing had tentatively accepted, people familiar with the matter told the South China Morning Post.

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