Stock markets rally after Trump and Xi talk trade

Roman Schwartz
November 2, 2018

President Donald Trump wants to reach an agreement on trade with Chinese President Xi Jinping at the Group of 20 nations summit in Argentina later this month and has asked key U.S. officials to begin drafting potential terms, according to four people familiar with the matter.

"Positive comments from President Trump over US-China trade tension are cheering the market in the short term", said Tai Hui, chief market strategist for Asia Pacific at JP Morgan Asset Management.

"It is hoped that the United States and (North Korea) will take care of each other's concerns and further advance the denuclearization of the Korean peninsula", he said, adding that "China will continue to play a constructive role".

Chinese tech stocks traded in the United States are surging across the board.

If you look at their economy, the Chinese economy is not doing well.

The United States has already imposed tariffs on $250 billion worth of Chinese goods, and China has responded with retaliatory duties on $110 billion worth of US goods.

The Trump administration has imposed tariffs on $250bn of trade with China this year and has threatened to hit all imports from China, which were worth $505bn last year.

However, both Chinese and the USA observers have said there is bipartisan consensus in the USA for tough action on China to force it to change its trade practices and industrial policies.

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"Just had a long and very good conversation with President Xi Jinping of China", Trump tweeted Thursday morning.

A Justice Department indictment targeted two companies based in China and Taiwan and three individuals, saying they conspired to steal trade secrets from USA semiconductor company Micron Technology Inc.

On Thursday Chinese Premier Li Keqiang also told a group of visiting USA politicians that China and the United States could overcome their differences and get relations back on track if they worked together in a spirit of mutual respect. In response, Beijing said it would impose taxes on 5,207 United States imports worth about $60 billion.

"We do hope that China and the United States will meet each other halfway and work together in the spirit of mutual respect and equality", Li told Trump's fellow Republicans.

Tennessee Senator Lamar Alexander told the official the US and China are competitors not adversaries and suggested they can prosper together.

One person said a sticking point in any potential deal is intellectual property theft, where the Trump administration has sought to take a hard line.

"China wants to make a deal".

Trump warned that if China doesn't "treat us fairly, we're not going to treat them fairly" in remarks at an event for American workers at the White House.

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