Trump says China trade deal may have to wait amid sticking points in talks

Trump says China trade deal may have to wait amid sticking points in talks

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LONDON – President Donald Trump said on Tuesday a trade deal with China might have to wait until after the U.S. presidential election in November 2020, denting hopes that the two largest economies would soon reach an initial deal to ease their damaging trade war.
“I have no deadline, no,” Trump told reporters in London, where he was due to attend a meeting of NATO leaders.
“In some ways, I like the idea of waiting until after the election for the China deal. But they want to make a deal now, and we’ll see whether or not the deal’s going to be right; it’s got to be right.”
Trump’s remarks sent stock prices tumbling and triggered a rush into safe assets such as U.S. Treasury debt. MSCI’s measure of global stock performance .MIWD00000PUS slid 0.9%, while the U.S. benchmark S&P 500 Index .SPX dropped 1.22%, its largest fall in nearly two months. Investors piled into government bonds, driving the yield on the 10-year U.S. Treasury note US10YT=RR to a one-month low near 1.7%. The dollar weakened against a basket .DXY of key trading partners’ currencies. Trump’s comments came as sources in Beijing and Washington familiar with the talks said that the two countries have made progress, but are still wrangling over whether existing U.S. tariffs will be removed and over specific levels of Chinese purchases of U.S. agricultural products as part of a “phase one” trade deal.
“The Chinese side must have such a requirement, because the Chinese side has promised more U.S agricultural purchases. This is in a way, to some extent, a transaction,” a Chinese source who advises Beijing on the talks told Reuters.
A Washington-based source briefed on the talks said that the U.S. side is willing to remove some tariffs, but wants additional concessions from Beijing to curb the forced transfer of American technology to Chinese firms.
While the deal being discussed includes new protections for trademarks, copyrights and other intellectual property, trade sources have said it would leave the most difficult technology transfer issues to future talks.
Trade experts say the most likely tariffs to be removed would be 15% duties imposed on Sept. 1 on about $125 billion of Chinese consumer goods, including smart speakers, Bluetooth headphones, television sets and footwear.
But Trump’s most recent trade actions may leave Chinese officials concerned about whether he would uphold an initial deal.
On Monday, he said he would hit Brazil and Argentina with trade tariffs for “massive devaluation of their currencies”.
The United States then threatened duties of up to 100% on French goods, from champagne to handbags, because of a digital services tax that Washington says harms U.S. tech companies.
“All of these things are affecting the Trump administration’s credibility, but both sides have credibility problems,” said Scott Kennedy, a China economics expert at the Center for Strategic and International Studies in Washington.

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