Meeting between US President Donald Trump and Chinese President Xi Jinping is the most anticipated event of the G-20 summit and market is hoping for both to reach a trade agreement.
President Xi, while speaking to state media, told that he was looking forward to meeting American President during the G-20 summit that is to be held during the next week. 20 minutes earlier to Xi’s talk, President Trump told the public through a tweet about having “good telephone conversation” with his Chinese counterpart.
Analysts are interested to see how America is going to move forward with sanctions on Chinese tech giant Huawei as it may indicate the future for other Chinese companies in the United States. While the expectations gap remains wide between both sides, both Presidents seem keen on resolving the conflict and reaching an agreement.
According to CNBC translation of a report by Xinhua, Chinese state news agency, Xi emphasized for both sides to “resolve the problem through fair dialogue” and to “protect the rational concerns of both sides”. Mr. Xi also hoped for the United States to fairly treat Chinese companies.
Markets positively received the news and both Chinese and American stock indexes witnessed a strong positive trading trend in anticipation of both economy giants finally reaching an agreement. According to analysts, the best outcome of this meeting could be an agreement to not raise tariffs. However, it can be a tricky job to find the right balance to ensure the interests of both parties are met. The risk of the US going forward with proposed tariffs is high in an event of any imbalance in the dialogue.
A major motivation for President Trump to resolve the conflict is the much-needed support from the US business community as the elections come near. Various American companies are concerned about proposed tariffs and relations going sour with China, as China remains the most suitable destination for manufacturing due to the wide availability of cheap labor. This is especially true for electronics, clothing and other consumer goods.
Many things have changed since the trade talks went south in May. The opposition for tariffs has increased across all segments of American society. China also indicated the US that it is not ready to bend in front of American pressure. Moreover, several key officials since May have been changed. All these factors have raised hopes of analysts and market observers in support of positive outcome of the proposed meeting next week.