What to Expect
Tomorrow, Chinese President Xi Jinping will join President Donald Trump for a two day meeting. The two leaders will hold talks at Mar-a-Lago, Trump’s luxurious Florida resort named, and some have questioned whether the somewhat informal venue suggests that the US President is aiming for a less-formal, more casual conference, although the US administration has made it clear that the meeting will include many serious topics.
One of Trump’s greatest concerns is trade deficits, since eight US states have a trade surpluses with China. However, on the upcoming meeting Xi will be able to show that fresh data indicates that in February, China became the number one buyer of American crude oil. Furthermore, America’s imports from China had their largest one-month decrease on record.
China faces an economic growth slow-down and desperately need trade borders to remain open. The US will need to decide how much political influence it wants in the region, how much it wants to pressure China in topics such as Taiwan and – more importantly – North Korea. Just this week, ahead of the XI-Trump meeting, North Korea launched another ballistic missile test, in a step that can only be seen as provocation.
The meeting outcome will show how focused the current US administration manages to be in its diplomatic talks with such a large and important partner. There will be little use of pre-election threats to impose a 45% tax on all Chinese goods or accusing China of manipulating its currency. Trump will need to both show clear, realistic goals as well as the ability to pay attention to China’s list of priorities. Will he succeed or will this be just another tension-filled, unfruitful encounter with a foreign leader? Investors worldwide will be waiting for signs.
Stay informed and take advantage of trading opportunities.
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