European stocks are trading higher on Wednesday, helping to boost U.S. stock index futures higher shortly before the cash market opening. The catalyst behind the strength is a report from Bloomberg suggesting the United States and China were inching closer to a trade deal.
The news is an about face from the narrative that drove Asian shares lower earlier in the day and Wall Street stocks sharply lower on Tuesday. That reaction was to President Trump’s comment that he may delay a trade deal with China until after the 2020 U.S. presidential election.
US-China Move Closer to Trade Deal
Bloomberg is reporting that the U.S. and China are moving closer to agreeing on the amount of tariffs that would be rolled back in a phase-one trade deal despite tensions over Hong Kong and Xinjiang, people familiar with the talks said.
“The people, who asked not to be identified, said that U.S. President Donald Trump’s comments downplaying the urgency of a deal shouldn’t be understood to mean the talks were stalling, as he was speaking off the cuff. Recent U.S. legislation seeking to sanction Chinese officials over human-rights issues in Hong Kong and Xinjiang are unlikely to impact the talks, one person familiar with Beijing’s thinking said,” Bloomberg reported.
“U.S. negotiators expect a phase-one deal with China to be completed before American tariffs are set to rise on December 15, the people said. Outstanding issues in the talks include how to guarantee China’s purchases of U.S. agricultural goods and exactly which tariffs to roll back, they added.”
The Bloomberg report also said, “U.S. Trade Representative Robert Lighthizer’s office didn’t respond to a request for comment. China’s Ministry of Commerce didn’t immediately respond to a fax seeking comment on tariff rollbacks.”
Finally, when asked in Seoul about whether the trade talks can be finished this year, China’s Foreign Minister Wang Yi said, “it depends. China’s stance is very clear. There is hope, as long as it is based on mutual respect and equal consultations,” according to Phoenix TV.
This article was originally posted on FX Empire