Chinese stocks rocketed higher on Trump’s trade tweet, but a deal isn’t a sure thing
“China is likely to agree (to) some sort of deal and just run the clock down on the Trump administration,” Chris Rogers, research analyst at Panjiva, a supply chain data company that’s part of S&P Global Market Intelligence, said in a phone interview last week.
Tariffs have hit both Chinese and U.S. businesses, data show. Beijing is also struggling to crack down on high debt levels while maintaining stable growth. A boost from a surge in Chinese exports that happened in anticipation of tariff increases is also fading.
The U.S. imposed tariffs on $250 billion worth of Chinese goods last year, while Beijing retaliated with duties on $110 billion worth of imports from America. During a G-20 meeting in Argentina that concluded Dec. 1, Trump agreed not to raise duties further if both countries could reach an agreement on trade within 90 days.
“Finding a resolution to the trade (tensions) that eliminates tariffs would greatly reduce uncertainty in the business community,” Jake Parker, vice president of China operations for the U.S.-China Business Council, said Monday. He noted that the tariffs have had a significant impact on U.S. businesses, especially those in agriculture and retail.
“We’ve also heard from a number of companies because their costs have risen, that has put them in a less competitive position vis-a-vis their European and Japanese counterparts,” Parker said. “Once you lose market share it’s very hard to regain that in the near term.”
The Chinese Ministry of Commerce and Ministry of Foreign Affairs did not respond to CNBC’s faxed requests for comment on Monday. Details on a potential meeting between Trump and Xi were unclear.