Global stocks rise on reports US, China close to trade deal

Global stocks rise on reports US, China close to trade deal

Global stocks rise on reports US, China close to trade deal

China and the United States are in the final stages of completing a trade deal, the Wall Street Journal reported on March 3.

Beijing has offered to lower tariffs and other restrictions on American farm, chemical, auto and other products and Washington considering removing most, if not all, sanctions levied against Chinese products since a year ago, according to the Wall Street Journal.

Official trade data due to be released on Wednesday also are expected to show the US trade deficit in goods with the world hitting a new record in 2018 because of the combination of a surge in imports to get ahead of the new tariffs a year ago and slowing exports.

Chinese officials have made clear, in a series of negotiations with the U.S. in recent weeks, that the quick removal of levies on US$200 billion of Chinese goods was necessary for the finalisation of any deal, the sources said. The USTR announced a review of Indian's involvement in the program in April 2018. The U.S. also wants China to refrain from bringing up any challenges at the World Trade Organization.

But Lighthizer and his team are more focused on China making structural changes to its intellectual property practices and policies that require USA companies to transfer their technology to Chinese entities as a condition of doing business in the country.

China is cautiously optimistic about reaching a trade war deal with the U.S., but it is prepared to retaliate if Washington returns to tariffs after the Xi Jinping-Donald Trump meeting expected this month, analysts said. That's because shipments to China virtually halted when the trade war began.

Trendmacro CEO Donald Luskin says President Trump's optimistic approach towards a U.S-China trade resolution is helping the markets.

Robert Lighthizer, who is the USA trade representative, has been speaking on behalf of the US against the officials in China.

"I'm never afraid to walk from a deal, and I would do that with China , too, if it didn't work out", the president said.

And U.S. stocks have rebounded from their worst December since the Great Depression on signs the world's two largest economies are resolving their trade differences without further escalation. The tariffs are part of the tit-for-tat trade war past year when China retaliated over USA tariffs by targeting agriculture.

The study by Goldberg, Pablo Fajgelbaum of UCLA, Patrick Kennedy of the University of California, Berkeley, and Amit Khandelwal of Columbia also found that consumers and USA companies were paying most of the costs of the tariffs.

China is offering to lower tariffs on USA farm, chemical, auto and other products, the Journal said, citing people familiar with the situation. "'Assuming both sides make additional progress, we will be planning a Summit for President Xi and myself, at Mar-a-Lago, to conclude an agreement'".

An economic white paper is unlikely to sway Trump's opinion about tariffs-he's the Tariff Man, after all-but this analysis is the most comprehensive summary yet of the ongoing costs of the White House's misguided protectionism.

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