Trump says US, China 'getting very close to a big deal' on trade
By Michele Maatouk
Date: Thursday 12 Dec 2019
(Sharecast News) - US President Donald Trump tweeted on Thursday that the US and China were "getting very close to a big deal" on trade.
"They want it, and so do we!" Trump said, ahead of the 15 December deadline for the imposition of new US tariffs on $150bn of Chinese goods.
The Wall Street Journal cited sources as saying that US negotiators have offered to cut existing tariff rates by up to 50% on $360bn of Chinese imports. It said US negotiators had also offered to cancel new China tariffs that had been due to kick on Sunday.
It was understood that the US would reimpose the original tariff level if China fails to carry out its pledges.
WSJ said the US made the tariff offer in recent days as both sides strive for a phase one agreement.
The US is asking China for firm commitments on increased US products and President Trump will hold a meeting on Thursday to discuss trade, it added.
US equity markets got a boost, with the Dow and the Nasdaq both up 0.9% and the S&P 500 up 0.6%. The S&P hit a record high.
European stocks also pushed higher on the news, with the benchmark Stoxx 600 index 0.6% firmer and Germany's DAX and France's CAC 40 0.9% and 0.8% higher, respectively. London's FTSE 100 was ahead 1%.
Neil Wilson, chief market analyst at Markets.com, cautioned: "Hopes for a trade deal can be easily dashed though...only ever one tweet away."
Spreadex analyst Connor Campbell said: "Interestingly, not only did he say that 'they want it' - a regular refrain from the President - but that 'so do we!' On top of this the WSJ reported that US negotiators have offered to cut existing tariffs - Beijing's major red line - to get the deal done.
"All this has sparked hopes a 'phase one' agreement can be put in place before the US smacks another $156 billion in Chinese goods with tariffs on Sunday. Or, if not a signed off deal itself, then at the very least a delay to that long-scheduled hike in order to give time for the i's to be dotted and the t's to be crossed."
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