China now says it wants to hold more talks this month to hammer out the details of the U.S.-China mini-deal announced by President Donald Trump on Friday before Chinese President Xi Jinping will sign it, both Bloomberg and the Washington Post are reporting today.
China said it may send a delegation led by Vice Premier Liu He, China’s top negotiator, to Washington to finalize a written deal that could be signed by the presidents at the Asia-Pacific Economic Cooperation summit next month in Chile.
But Bloomberg is also reporting that China isn’t satisfied with the U.S. concession on suspending/delaying the October 15 round of U.S. tariffs and also wants to see the U.S. scrap a planned December round of tariffs. There’s been no sign from the White House that U.S. negotiators have been told to offer that concession.
In other words here we are again: The U.S. announces a done deal and China says, Not so fast. The state-run Xinhua news agency hasn’t mentioned a deal and China’s Ministry of Commerce has only said that “the two sides have made substantial progress” and “agreed to work together in the direction of a final agreement.” The state-run Xinhua news agency didn’t mention a deal either.
No one knows whether the grudging tone of the Chinese comments signifies anything. It could, some analysts note, once again indicate communications and language difficulties between the two sides. For example, Geng Shuang, a foreign ministry spokesman, reiterated on Monday that both sides had made progress and said he hoped “the U.S. will work with China and meet each other halfway.” Other analysts note that President Xi faces political opposition to any deal that doesn’t remove the punitive tariffs altogether. Hardliners in the Communist Party had argued that the mini-deal represents that kind “unequal treaty” that Western colonial powers forced China to sign in the nineteenth century. “The U.S. must concede on its December tariff threat if they want sign a deal during APEC summit, otherwise it would be a humiliating treaty for China,” said Huo Jianguo, a former Chinese commerce ministry official who is now vice chairman of the China Society For World Trade Organization Studies.
With this degree of uncertainty it’s not surprising that U.S. financial markets haven’t moved much today.
As of 2 p.m. the Standard & Poor’s 500 was dow 0.05% and the Dow Jones Industrial Average was up 0.03%. The NASDAQ Composite had slipped 0.01% and the Russell 2000 small cap index was off 0.49%. the iShares MSCI Emerging Markets ETF (EEM) was down 0.13%.
Oil fell more substantially with U.S. benchmark West Texas Intermediate down 2.27% to $53.46 a barrel. International benchmark Brent crude was lower by 2.15% to again dip below $60 a barrel to $59.24.
Gold was up 0.60% to $1497.70 an ounce and silver climbed 0.95% to $17.71 an ounce.
The yield on the 10-year Treasury was unchanged at 1.73% and the yield on the 2-year Treasury was at 1.59%.
The dollar gained with the Dollar Spot Index (DXY) up 0.19%