US-China trade dispute
According to Reuters, citing China’s Ministry of Commerce, “Chinese Vice Premier Liu He will visit Washington on Thursday and Friday to continue trade negotiations with the United States.”
US-China trade talks look to have been fast-tracked as the March deadline nears. Ever since the United States and China agreed on a 90-day truce last year, Trump administration officials have maintained that the March 2 deadline won’t be extended. However, earlier this month, President Donald Trump said that March 2 could be a soft deadline and that he’s open to extending it, although he “would prefer not to.”
Nonetheless, the fast-track status of the talks coupled with Trump’s signal that the deadline could be extended look to be positive steps. While the Huawei issue and the United States’ apprehensions over its allies making deals with Chinese companies in the 5G space have been new irritants as the world’s two biggest economies discuss a trade deal, the overall atmosphere is still much better than it was last year. In August, the United States and China imposed tariffs on each other’s goods even as talks were underway.
Equity markets have also rallied this year, in part due to optimism about a US-China trade deal. Apple (AAPL), Microsoft (MSFT), NVIDIA (NVDA), and Advanced Micro Devices (AMD) have risen 8.5%, 6.6%, 17.8%, and 28.32%, respectively, based on their closing prices on February 15. Among Chinese companies (TCEHY), Alibaba (BABA), Baidu (BIDU), and JD.com (JD) have risen 21.2%, 7.2%, and 14.5%, respectively, in the period.
In the next article, we’ll discuss more about the US-China trade talks.