Some form of a US-China trade deal is expected to be formalized by the end of the week before US tariffs on Chinese goods worth $160 billion kicks in on Sunday, according to analysts.
The two sides haven’t been able to reach an agreement on a Phase One deal to end the now 17-month trade war.
US-China trade negotiators are working “around the clock” to sign a trade deal before tariffs kick-in, according to White House economic adviser Larry Kudlow.
US President Donald Trump already has delayed this round of tariff increases on Chinese goods that include smartphones to December 15 from an earlier kick-in date this year.
“They’re going to come out and say ‘we’ve got a deal … we’re working on tweaking, fine-tuning it,” said Kenny Polcari, senior market strategist at Slatestone Wealth, in a interview on US TV yesterday. “But, to show good faith, we’re not going to impose these tariffs.’ And then the markets will rally.”
Analysts feared that Trump would make good on his threats that he was willing to wait till after the US presidential election in November 2020 to sign a trade deal.
However, high level officials in the Trump Administration stated that it was unlikely that Trump would allow tariffs to kick at the end of the week.
“We have a deadline coming up on the December 15 for another tranche of tariffs, I do not believe those will be implemented and I think we may see some backing away,” said US Agriculture Secretary Sonny Perdue on Monday at a conference in the US state of Indiana.
The Organization for Economic Co-operation and Development (OECD) stated that the ramifications of the US-China trade war has caused global economic growth to erode to Great Financial Crisis levels ten years ago.