James Trescothick

Education Manager at easyMarkets. Passionate about the markets, the excitement, the story driving the markets at the time, the fundamentals and even the technicals.

Concerns over an imminent U.S.-China trade war quickly evaporated this month after an executive meeting between Donald Trump and Xi Jinping ended on friendly terms, setting the stage for a potentially amicable relationship between the world’s greatest economic powers.

The U.S. president hosted his Chinese counterpart over a two-day summit in Mar-a-Lago April 6-7, where the two sides discussed everything from trade to geopolitics. Trump, who has long accused China of unfair trade practices, had warned that his first meeting with the Chinese President would be “very difficult.”[1]

However, the relationship got off on the right foot, with both countries vowing to work together on key issues.

“We have made tremendous progress in our relationship with China,” Trump told reporters in Mar-a-Lago after the two-day meeting. “We’ll be making a lot of additional progress. The relationship developed by President Xi and myself I think is outstanding.”[2]

More recently, Trump hailed Xi for his stance on North Korea, a nation that relies heavily on China for economic support.

“Think of it – he’s working so nicely that many coal ships have been sent back, fuel is being sent back,” Trump said of Xi, referring to a recent decision by China to direct trading companies to return North Korean coal cargos.[3]

Back in February, China placed a ban on North Korean coal imports in response to Pyongyang’s missile tests. This was a critical blow to Pyongyang, which depends on coal for roughly 40% of its exports.

The Chinese leader said his country “insists on realizing the denuclearization of the peninsula… and is willing to maintain communication and coordination with the American side to see over the issue on the peninsula.”[4]

Trump has promised China a better trade deal if it cooperates with Washington in halting North Korea’s missile program. This is a significant departure from Trump’s pre-election rhetoric, where he vowed to label China a currency manipulator immediately after entering the White House.

China’s trade surplus with the U.S. rose to $17.7 billion last month, data from the General Administration of Customs reentry showed. For the first quarter, the surplus amounted to $49.6 billion.

Trump would like to shrink Washington’s deficit with Beijing. The new administration has pledged to enact tougher trade remedy laws and seek more unilateral trade agreements in the future.[5]

[1] Reuters (March 31, 2017). “President Trump Predicts ‘Very Difficult’ Meeting With Chinese Leader Xi Jinping.” Fortune.

[2] Gordon G. Chang (April 10, 2017). “The U.S.-China Showdown at Mar-a-Lago: How Trump Undercut Xi.” The National Interest.

[3] Toluse Olorunnipa (April 18, 2017). “Trump Hails Xi Push on North Korea, Backs Off on Currency Gripe.” Bloomberg.

[4] Christopher Woody (April 12, 2017). “China appears to be making a key concession on North Korea.” Business Insider.

[5] Reuters (April 12, 2017). “China’s Trade Surplus With the U.S. Rose to $17.7 Billion Last Month.” Fortune.

Was this article helpful?

0 0 0