Has Trump Managed to Breach the Great Wall of China?




Another round of trade talks between the United States (SPY) and China (BABA) (TCEHY) is scheduled for today and tomorrow in Washington. The two sides met last week in Beijing also. US and Chinese delegations have met frequently over the last two months to discuss a trade deal to end the trade war between the world’s two biggest economies.

To be sure, while the United States and China have been discussing a trade deal for quite some time and even reached a truce in May, there have been palpable differences between the two sides that have been visible in their statements. While the US statements have highlighted trade as well as structural issues, China’s statements have focused mainly on trade issues.

In August, China said that it “conducted constructive and frank exchanges on economic and trade issues of common concern.” In December, China said that the talks focused “on economic and trade issues, exchanging ideas on problems of both sides’ concerns.”

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However, this year, we’ve seen a marked change in China’s statements, and they now closely align with what US President Donald Trump is seeking from the country. In January, China said the two countries had “extensive, in-depth and detailed communications on trade and structural problems of mutual concerns.” Now, in February, China said the two sides “had in-depth discussion on topics of mutual concerns including technology transfer, intellectual property rights protection, non-tariff barriers, the service industry, agriculture, trade balance and implementation mechanism.”

Meanwhile, stock markets have been rising amid expectations of a trade deal. All the FAANG stocks, which include Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX), and Alphabet (GOOG), are in the green. Advanced Micro Devices (AMD), Intel (INTC), NVIDIA (NVDA), and General Electric (GE) have also risen 29.7%, 10.2%, 18.7%, and 33.4%, respectively, based on their closing prices on February 20.


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