When the US and Chinese presidents meet
US-China trade negotiations have stalled, and the two countries are aggravating the trade war instead of easing it. The last time the two countries’ presidents met was in December 2018, when the trade war was escalating.
After the meeting, they suspended their plans to increase tariffs on January 1, 2019, while they negotiated.
Even after the meeting, the Xinhua China 25 Index (FXI), the SPDR S&P 500 ETF (SPY), and the VanEck Vectors Semiconductor ETF (SMH) bottomed out in December 2018 before recovering in January. Investors believe more in actions than words—the market recovered when they saw that plans to increase tariffs had actually been suspended.
The US’s next move
However, the talks between the two countries paused in May, and the trade war escalated once again on increased tariffs, the US trade ban on Huawei, and threats from China that it would restrict the trade of rare earth minerals and restrict certain companies’ access to Chinese companies. The talks paused as the US complained that China had walked certain items back when the deal was ~90% complete. China complained that the US was adding unacceptable demands at a late stage of negotiations. At this point, the two countries stopped negotiating.
US President Donald Trump and Chinese President Xi Jinping will meet at the G20 Summit in Japan on June 28–29. US Treasury Secretary Steven Mnuchin has urged China to rejoin trade talks after 11 rounds of negotiations. Even if China is willing to restart the talks, it remains to be seen whether the two presidents will reach some level of agreement or escalate trade tensions further.