We’ll Know How the Meeting Went by How Trump Handles October 15 Delayed Tariffs

If Trump moves forward with the tariffs on October 15 then this will complicate matters since it will indicate that both sides are still far apart and Trump feels China needs to continue to feel pressure in order to finish a deal in a timely manner.
James Hyerczyk

After the U.S. equity market close on Thursday, CNBC reported trade talks between the U.S. and China were set to resume October 10-11 in Washington, D.C., according to three people close to the talks. Chinese Vice Premier Liu He will be representing the delegation from Beijing, one of the people told CNBC.

The White House, the Treasury Department and the Office of the U.S. Trade Representative did not respond to CNBC’s requests for comment before publication. This isn’t a big deal. Perhaps they had nothing to say since the Trump administration said weeks ago they expected the talks with Beijing, which stalled out in May, to resume next month.

Will Liu Turn Hardliner?

Chinese Vice Premier Liu He attended spring negotiations as the “special envoy.” With that title, he was empowered to negotiate on behalf of President Xi Jinping and pledged to buy American Soybeans in the Oval Office with President Donald Trump.

However, when he returned to China, he was stripped of that title after Communist hardliners grew frustrated with some of the concessions to which he had agreed.

When he returns to Washington on October 10-11, it will be interesting to see if he presents himself as a hardline negotiator, which could hinder progress toward a trade deal. No one is expecting a deal to be struck at this meeting, but no one wants to see the United States and China move further apart, which could lead to an escalation of the trade war.

Watch the Dates

In September, President Trump obliged a formal request by Chinese officials to delay a planned escalation of tariffs on October 1, set to coincide with the politically sensitive anniversary of the People’s Republic. Trump followed through with the request so tariffs on $250 billion in Chinese goods will now rise to 30% on October 15, four days after the next round of talks wraps.

I believe investors will find out if the trade negotiations were successful if they watch how Trump handles the postponed tariffs.

If he decides to further delay the tariffs then this will send a signal that progress was made at the negotiation table.

If Trump moves forward with the tariffs on October 15 then this will complicate matters since it will indicate that both sides are still far apart and Trump feels China needs to continue to feel pressure in order to finish a deal in a timely manner.

A further delay in tariffs should be bullish for stocks. An escalation of tariffs should be bearish.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.