Result of US-China talks: Short-term relief, long-term risks

Result of US-China talks: Short-term relief, long-term risks

President Donald Trump defended his administration's approach to resolving a trade war with China in a series of tweets Monday, following three days of negotiations with the Chinese that ended with little clarity. That fight has economic, strategic and political logic that his confrontations with Canada, Mexico, Western Europe and Japan lack.

Last year, the US had a record $376 billion deficit with China in the trade of goods; that was the largest by far with any nation. For months, Trump railed against China to cut its trade surplus with the United States and threatened higher tariffs.

"As trade tensions settle and peak growth/earnings anxieties subside, the clouds are lifting for stocks", JPMorgan analysts said in a note.

"On China, Barriers and Tariffs to come down for first time", Trump tweeted.

Last month, the administration proposed tariffs on $50 billion of Chinese imports to protest the forced technology transfers.

In an interview earlier on Monday with CNBC, Mnuchin characterized the US tariff plan as suspended, but warned that "the president can always put tariffs back on".

Putting the tariffs on hold is meant to temporarily ease tensions between the two nations during the trade talks.

Severe thunderstorms expected to impact afternoon commute
Almost 100 customers without power in Germantown are expected to have the issue fixed by 5:30 p.m., according to National Grid. The powerful wind gusts came and went quickly this evening, but the rain will take longer to clear out of the Richmond area.

Asked about the administration's evolving China trade strategy, several Republicans said the White House needed to fill them in on what was happening, as majority had only heard and read media reports about the developing talks over the weekend. But he indicated that they could be imposed if a trade deal with China did not make progress. The Chinese government says it will buy more US goods, including energy and agricultural products, and Treasury Secretary Steven Mnuchin says the USA postponed tariffs on up to $150 billion in goods from China. He suggested that USA farms could double their sales to China if given broader access to its market.

Shares of AK Steel (AKS.N) fell 5.1 percent and U.S. Steel (X.N) was down 3.8 percent following the weekend trade announcement. Trump later ordered Lighthizer to seek up to an additional $100 billion in Chinese goods to tax.

Over the weekend, the two sides pledged to keep talking about how China could import more energy and agricultural commodities from the United States so as to narrow the $335 billion annual US goods and services trade deficit with China, although details and a firm timeline were thin.

China responded by targeting $50 billion in USA products, including soybeans - a shot at Trump supporters in America's heartland.

Italy's far-right League and the 5-Star Movement agreed on a candidate to lead their planned coalition government and to implement spending plans seen by some investors as threatening the sustainability of the country's debt pile.

China and the USA have agreed on the "broad outline" of a settlement to the seven-year ban on ZTE Corp. buying American technology, ending a punishment that threatened to put the company out of business, the Wall Street Journal reported.

White House economic adviser Larry Kudlow told CNBC yesterday that ZTE is "not going to get off scot-free" and that it still faces fines, "very severe compliance measures, a new board of directors, a new management team". "It ain't gonna happen".

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