When the long-awaited dinner between Donald Trump and Xi Jinping ran for some two hours, many suspected the talks were indeed constructive.
While there will invariably be all manner of additional color and, quite possibly, competing accounts of exactly what unfolded between the U.S. and Chinese delegations on Saturday, the bottom line is that there will be no additional tariffs after January 1. The news was originally reported by CGTN and came a little over a half hour after Larry Kudlow described the dinner as having went “very well.”
Just after the dinner concluded, Trump left the Park Hyatt hotel en route to the airport to make his way back to D.C. No initial readout was made available from the White House. Kudlow’s comments came as U.S. officials boarded Air Force One.
The White House has since confirmed. Trump will leave the tariff rate on the $200 billion in Chinese goods which were taxed at 10% from September 24 as is – it will not be raised to 25% at the turn of the year.
China will reportedly purchase “a not yet agreed upon but very substantial amount of agricultural, energy, industrial and other product from the U.S.” in order to reduce the bilateral deficit. Purchases of agricultural product from U.S. farmers will begin “immediately.”
Also starting “immediately” will be negotiations on “structural changes” regarding IP theft and forced technology transfer as well as talks on non-tariff barriers and cyber theft.
These “transactions” will reportedly be concluded within 90 days. If there is no broader agreement after that period, the 10% rate on the $200 billion in goods which were taxed from September will be raised to 25%.
You can expect a relief rally in risk assets. This is, on the surface at least, more than the market was hoping for. When you consider this in conjunction with last week’s Powell-inspired rally, the stage is set for a risk-on move.
More to come.
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Dinner Date: What’s At Stake As Trump, Xi Dine In Buenos Aires
I count on H (and subscribe) for insightful and timely commentary on institutional and other credible insider sources which I lack access to. I also appreciate that i lack the wisdom to separate the wheat from the random gibberish on the internet and hence also appreciate commentary on any market moving mass market talking heads (regardless of their economic savvy).
H, can you please elaborate on what value this source really offers? It smells like propaganda of little more actionable value than say a fox news byline indicating the opposite generic take such as “trump stands strong at G20”. I know you mention phrases such as “early indications” regarding this source. But, i hope you understand your target audience doesn’t need rapid headlines from you… we pay for your experience filtering out and interpretting the gibberish.
Note the sentence ” If the early reports from CGTN are accurate, you can expect a relief rally in risk assets. According to the same early reporting, negotiations between Washington and Beijing will be” CGTN… Put it in your search engine to access the report for yourself.
The outcome is exactly what most people expected. No big surprises at this point, Neither one of them can afford for them to have their economy’s tank any further right now. Now we just wait and see what happens from here…….. I don’t have high expectations for smooth sailing from here.
Lol. how you feeling about that initial comment now that literally all of this has been confirmed? I report what’s important and I report it when you need to know it. In this case, the “when” was “as soon as it crossed any wire anywhere”. And that’s when you got it. You’re welcome.
Fair enough and thank you. When i did a search on CGTN, i just found a description of what sounded like a less than reliable source. Nice of you to append the WH statement to the original article… but it might be more in the spirit of journalistic integrity to add the fact that this came after the initial report i commented on.