The US treasury secretary has revealed that there were positive developments in the trade talks with China. The two countries are getting closer to finding a common ground about enforcing an agreement between them. Investors are waiting for more details regarding the enforcement approach, however.
The two largest economies in the world are affected by the trade war
US and China have been in a trade spat for over a year now. Many economists and analysts have expressed concerns that the trade war would dampen global growth. China’s economy experienced a slowdown recently, although recent numbers were higher than expected. The US yield curve inverted recently, which indicates for some that a recession may be near.
Trade tariffs may remain
Despite the progress in trade negotiations, the Trump administration was adamant to keep the tariffs. Economists believe the tariffs may be the enforcement tool. Trade negotiations are still ongoing and there is no clear time-frame as to when they will finish.
The trade war began with the Trump administration wanting to reduce the America’s trade deficit with China. Trump wants to open up the Chinese markets for American businesses and address intellectual property infringement by China.
The treasury secretary, Steven Munchin, commented that if the two sides manage to achieve a breakthrough, then it would be the biggest shift in the relationship between the two countries in many decades.
