The Dow went from notably in the red to slightly in the green on this headline this morning:
“In countdown to trade war talks, China ready to sweeten deal by buying American goods, source says”
While this is of course market-calming news, if all it does is accomplish the following (from the featured article), it doesn’t begin to address the real issues, or the existing tariffs that are continuing to do a real number on the global economy:
“As part of the discussions, China has offered to buy American products in exchange for a delay in a series of US tariffs and easing of a supply ban against Chinese telecommunications giant Huawei Technologies.”
From all I gather, the following (also from the article) — at least for the time being — makes sense to me:
“Observers said that with the turmoil even a simple agreement on Chinese purchases was far from guaranteed.
“Everyone knows that there is little trust on either side and deals over soybeans won’t change that,” said Scott Kennedy, senior adviser with the Washington-based Centre for Strategic and International Studies.
“It makes more sense to limit such displays and instead return as soon as possible to negotiations over structural issues that were suspended in early May when China backtracked on its offer.”
James Zimmerman, a former chairman of the American Chamber of Commerce in China and a partner with a law firm Perkins Coie, said a negotiated purchase agreement risked violating market rules and could be challenged by other countries.”
“The October meeting is to get peacefully past China’s 70th anniversary. The talks will stall to 2020 when Trump becomes desperate for an election-year deal, any deal,” Zimmerman said.”