Negotiations on Wednesday between the United States and China failed to reduce the U.S. trade deficit with China. The annual trade meeting yesterday ended on a sour note with no public comments and no resolution of bilateral economic or trade-related issues.
Among the issues discussed at the meeting were the reduction of excess Chinese steel capacity, a reduction in tariffs for the automobile industry, access for the U.S. to China’s financial services market and lifting ownership for foreign firms in China.
Despite the stalled negotiations, both sides spoke positively of the meeting in independent statements, with the Chinese embassy commenting that “The two sides will expand areas of cooperation in services and increase trade in services; expand mutual investment, and create a more open, equitable, transparent and convenience investment environment.”
Nevertheless, most analysts view these positive statements as a façade, underlying a persistent tension that remains between the countries which stems from the fact that Presidents Trump and Xi differ greatly on what they want. President Xi is also under additional stress in advance of the 19th Party Congress, a three-week Congress which will end with the appointment of the country’s next Communist leader.
Market Updates
The dollar rebounded slightly during the London session, trading up 0.26 percent against the yen to 112.24 after struggling during the Asian session. The euro was slightly down, trading at $1.1493 as of 12:36 p.m. GMT.
Global stock markets extended their rallies after the Bank of Japan announcement that took a cautious tone. The FTSE was up 0.71 percent by midday and the DAX was up 0.42 percent. Asian markets closed broadly higher on Thursday and the rally is expected to extend into the U.S. trading session.