ICYMI - US and China set to relaunch trade talks but with little changed

09 Jul 2019, 14:21 · Views 3,095

Talks are set to resume this week but the major sticking points remain

ICYMI - US and China set to relaunch trade talks but with little changed

There isn't much optimism in markets just yet as US and China are reportedly set to speak again some time this week in an effort to relaunch trade talks after the Trump-Xi meeting. Both sides are still at odds over certain matters and that is also still evident after both leaders met in Osaka at the end of last month.

The Chinese camp continues to reiterate that they would only step forward with more agricultural purchases if the US removes existing tariffs. And they have been clear that no firm commitments were made until they see more "willingness" from the US to get negotiations back on track.

The whole Huawei issue also isn't really reflecting a positive mood with Trump having said that the US will ease up on restrictions against the Chinese tech firm but we saw trade adviser Peter Navarro say that these will only involve 'lower tech items'.

However, the core issue as we begin trade talks again is that the red flags for both countries are already made clear and they won't be changing, at least not significantly. This means that it will come down to more of a political standoff and a willingness by either Trump or Xi to relent on their current stance in negotiations.

I reckon that will be something that remains very difficult to bridge or for both sides to achieve a compromise on. Both countries will want to show that they have "won" at the end of all of this but given how much animosity and disagreement there is, the end won't be coming any time soon - that's for sure.

So, if markets aren't all that optimistic despite all the recent chatter to get both sides back to the negotiating table, they've good reason to be in my view.

Reprinted from Forexlive，the copyright all reserved by the original author.

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