(Marketwatch) U.S. and China trade officials will meet as Beijing requests existing and planned tariffs be canceled in exchange for buying more U.S. agricultural products.
Jefferies analyst Christopher Wood says existing tariffs could be unexpectedly dropped if a trade deal is reached, resulting in a rally in global stocks.
He said: “Almost no one is expecting this, but this is what should happen should a deal be agreed, since the tariffs were put in place by the Trump administration as leverage in a negotiation.”
Wood said he was increasingly optimistic of a U.S.-China trade deal this quarter but that the key question was whether that would be a “minideal” or something more substantial in the form of tariffs being dropped.
However, if a deal were to be struck and tariffs stayed in place, Wood said it would signal a long-term slump in Sino-American relations.
President Trump announced the world’s two largest economies had reached a partial trade agreement, describing it as “phase one,” earlier this month.
Trade representatives have been thrashing out the wording of the agreement, which could be signed by Trump and Chinese President Xi Jinping next month.
China has reportedly asked for planned and existing tariffs to be dropped in exchange for buying more U.S. agricultural goods.
