DEVELOPING: US-China trade uncertainty fuels market plunge

Daniel Fowler
December 4, 2018

"We said that you also have to demonstrate greater market access, and one of the many ways they can do that is by purchasing hundreds of billions of dollars of both agriculture and non-agriculture products".

Markets, however, pulled back sharply after Monday's rally as doubts crept in over what could realistically get accomplished in the tight negotiating window.

Mr Trump said his team of trade advisers, led by China trade hawk and United States trade representative Robert Lighthizer, would determine whether a "REAL deal" with China was possible.

"The negotiations with China have already started".

As part of the talks on Saturday night, Trump agreed not to increase existing tariffs on Chinese goods or impose any new ones for 90 days, while talks took place. Let the negotiations begin.

While Mnuchin said the president reserves the right to escalate tariffs should negotiations not pan out as planned, he cast the weekend's talks as a breakthrough in the administration's efforts to check China and said the discussion included everything from purchasing more United States goods to intellectual property, to currency manipulation.

"There's a specific understanding that we're going to now turn the agreement the presidents have into a real agreement over the 90 days", Mnuchin told reporters during a gaggle outside the West Wing, while the president was busy tweeting on the topic and said he has a "very strong and personal relationship" with President Xi.

Another significant take-away from the preliminary agreement could be its impact on energy markets, both US oil import to China and perhaps even more importantly from a development perspective liquefied natural gas (LNG) imports.

United Kingdom can unilaterally stop Brexit, top European Union court adviser says
The case comes as pressure builds from Brexit opponents for a second referendum on the decision to leave the bloc. She said: "He has made clear that the United Kingdom can stop the ticking clock of Brexit before it is too late".

Mnuchin cast the weekend dinner as a breakthrough in the trade standoff with China and said there were "very, very specific" items that the two leaders agreed to have incorporated into a broader agreement that has yet to be finalized.

While Trump hailed the agreement with Xi "an incredible deal", a lack of detail from the Chinese side has left investors and analysts wondering if Trump's exuberance is warranted.

Until then, the only buyers likely to make purchases of pricey USA grain will be state-owned enterprises instructed by Beijing to buy soybeans for state reserves.

The United States also expects China to promptly address structural issues, including intellectual property theft and forced technology transfers.

Moreover, none of the commitments that US officials said had been given by China, including reducing its 40 percent tariffs on autos, were agreed to in writing and specifics had yet to be hammered out.

White House trade director Peter Navarro detailed on Monday what the administration hopes to accomplish by lifting tariffs on China for 90 days.

‎U.S. Trade Representative Robert Lighthizer has been helping to lead trade talks for the administration on multiple fronts, including China.

Meanwhile, as Trump and White House officials tout the truce, Beijing has said little on a pact that cheered markets but left many questions unanswered.

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