We witnessed two positive signals in the trade talks with China yesterday. First of all, President Trump has agreed to meet with China’s trade negotiator, Vice Premier Liu He. This could be a signal which indicates enough progress has been made to warrant a face to face meeting. The deadline for an increase of U.S. tariffs on Chinese goods is looming, next Friday. President Trump has repeatedly said he would extend a moratorium on tariff increases if progress warranted such a move.
There are reports which indicate work is being done on “Memorandums of Understanding.” These are essential for starting to develop a trade framework. These documents would certainly include topics such as forced technology transfers, intellectual property theft, non-tariff barriers and more. President Trump made optimistic tweets, last weekend, after a round of trade talks in Beijing. However, the White House is declining to comment on any planned meetings today.
Reports suggest China has also agreed to make purchases of another 30 billion dollars worth of U.S. Ag products each year. This would be on top of what the country was purchasing before the trade war. Agriculture Secretary Sonny Perdue refused to comment on the report, saying he didn’t want to raise expectations. Market Analysts are still cautious over these reports. China could say anything it wants to get a trade deal done. The problem will lie in the deals enforcement.