US and China resume trade talks

The two nations are negotiating a trade agreement after a contentious 2018.

US money Source:Bloomberg

There may be a thawing in the US-China trade war. After agreeing to have trade talks, the two nations have agreed to meet to negotiate about trade agreements.

China and US hit by trade tariffs

The US imposed $250 billion worth of tariffs on imported Chinese goods in early 2018,and China retaliated with $5 billion of taxes on American goods. However, by December 2018, the nations tried to reach an agreement to put a hold on import taxes for 90 days. With the deadline approaching, the two nations are trying to end their stalemate.

The Chinese economy has suffered as a result of the tariffs with fewer car sales, but the US has also been affected. Apple reported weak first quarter (Q1) guidance, and noted that the trade war had an impact. Chief executive officer (CEO), Tim Cook, blamed sluggish sales of the iPhone on the US trade tariffs and the slowdown in China’s economy. National Public Radio (NPR) reporter, Yuki Noguchi, noted that the tariffs greatly impacted the countries.

‘The disputes between the world's largest economies already led to tariff hikes on a wide range of industrial, manufacturing and agricultural products. Those have had far-reaching impact on companies and markets,’wrote Noguchi.

What may happen in trade talks

Both nations are optimistic that a trade agreement can be reached. A Chinese foreign ministry spokesperson said he believed ‘the good faith, on the basis of mutual respect and equality, to resolve the bilateral trade frictions.’

US President, Donald Trump, said that a solution to the impasse can be found.

'I think China wants to get it resolved. Their economy's not doing well. I think that gives them a great incentive to negotiate,’ said Trump.

While China and the US are hopeful about the trade talks, trade experts like Julian Evans-Pritchard, economist at Capital Economics, is still cautious about the nations ending their trade war. He believes that the two nations are still at odds over the assertion of the US that China is stealing intellectual property.

‘There are concerns about how far apart the two sides still are. The main sticking point is going to be on industrial policy and intellectual property rights,’ said Pritchard.


This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

See an opportunity to trade?

Go long or short on more than 16,000 markets with IG.

Trade CFDs on our award-winning platform, with low spreads on indices, shares, commodities and more.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Bid
Offer
Updated
Change
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
China 300
-
-
-
-

Prices above are subject to our website terms and agreements. All share prices are delayed by at least 20 minutes. Prices are indicative only.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.