Published: Fri, September 06, 2019
Economy | By

U.S. and China agree to October trade talks in Washington

U.S. and China agree to October trade talks in Washington

They would be the first in-person, high-level discussions since a failed U.S.

President Donald Trump imposed 15% tariffs on about $112 billion worth of Chinese goods this past Sunday, meaning USA shoppers can look for higher prices on some foods, sports equipment, sportswear, musical instruments and furniture.

Trump and Chinese President Xi Jinping this summer agreed the United States would ease restrictions on Huawei Technologies and China would make unspecified purchases of USA farm products.

Talks between China and the USA are ongoing, but Trump's position appears to have changed again.

CNN reports that markets around the world began to rally after news that the two sides were resuming trade talks in the coming weeks. U.S., Asian and European stock indexes all touched one-month highs on Thursday.

The Dow Jones Industrial Average rose 372.68 points, or 1.41%, to 26,728.15, the S&P 500 gained 38.19 points, or 1.30%, to 2,975.97 and the Nasdaq Composite added 139.95 points, or 1.75%, to 8,116.83.

Aiding the rally was positive USA economic data, including an estimate of private sector payrolls growth and an acceleration of US services sector activity.

Washington began imposing 15% tariffs on an array of Chinese imports on Sunday, while China began placing new duties on U.S. crude oil.

This week China said it had lodged a complaint against the USA with the World Trade Organization (WTO), one day after new tariffs came into force.

Trump then settled on a 5% tariff hike on about $550 billion worth of Chinese imports, which he announced after the markets closed on August 23. But the new talks, on the agenda for early October, are spurring optimism.

"This trade war has gone on far too long, and the harmful consequences for American business and consumers continues to grow", said the group, which bills itself as the world's largest retail trade association.

Officials will "conduct conscientious consultations" in mid-September to prepare, the ministry said.

"Lead negotiators from both sides had a really good phone call this morning", China's commerce ministry spokesman Gao Feng said in a weekly briefing.

Xinhua also reported that working groups of both sides would conduct preparatory meetings "in earnest" as soon as in a week, "to create favorable conditions to achieve substantial progress" for the high-stakes talks in DC.

"Logically, it makes sense from economic and political standpoints for both Trump and Xi to put an end to the trade war", said Daniel Ikenson, director of the centre for trade policy studies at the libertarian Cato Institute.

Analysts noted that investors remain nervous and markets could react with volatility on comments or actions from either side.

China and the U.S. are locked in a fierce trade dispute.

Others have become increasingly focused on trying to calm financial markets and forestall any further economic fallout in the US where Trump's tariffs and the uncertainty surrounding the trade war are being blamed for a slowdown in manufacturing.

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