Trump says US, China getting close to ‘fair deal for everyone’

Bloomberg

US President Donald Trump said trade talks with China are back on after Beijing requested negotiations, easing immediate tensions after a weekend of tit-for-tat tariffs rocked financial markets and fuelled fears that the standoff would drag the global economy into recession.
Speaking at the Group of 7 meetings in Biarritz, France, Trump said US officials received two “very productive” calls from Chinese counterparts and he also lauded President Xi Jinping as a “great leader.” A spokesman for China’s foreign ministry wasn’t able to confirm the details of the phone calls on Monday, while a leading editor at a state-run newspaper said Trump exaggerated the significance of the trade contacts.
“You can say we’re having very meaningful talks, much more meaningful than I would say at any time frankly,” Trump said while meeting with German Chancellor Angela Merkel on Monday. “Maybe I’m wrong but we’re in a stronger position now to do a deal, a fair deal for everyone,” he added.
The Stoxx Europe 600 index rose after Trump commented on the chances for a China deal. Earlier US equity-future indexes increased on optimism that talks would restart. In Asia, shares on all major indexes declined led by Hong Kong which fell 2.3%.
Trump’s comments mark latest twist in months of talks that have seen moments of optimism give way to even greater escalation. While two sides have at times appeared close to a deal, China balked at US demands for market-based reforms in areas like state-run enterprises that could jeopardise the Communist Party’s grip on power.
Beijing’s retaliation to an earlier US tariff hike led to yet another increase from Trump, who said that existing 25% tariffs on some $250 billion in imports from China would rise to 30% come October 1.
Asked on Monday if he would delay tariffs on China, Trump said “anything’s possible.”
“China called last night our trade people and said let’s get back to the table,” Trump said earlier on Monday. “Now we’re dealing on proper terms, they understand and we understand. But that’s a great thing that happened, and they want to get something done. Now maybe it won’t get done, but this is the first time I’ve seen them where they really do want to make a deal, and I think that’s a very positive step.”
Hu Xijin, editor-in-chief of China’s Global Times newspaper, said on Monday that top trade negotiators hadn’t spoken by phone in recent days. Earlier on Monday, China’s top trade negotiator, Vice Premier Liu He, used a public appearance in China to call for a deescalation in tensions.
“We are willing to solve the problem through consultation and cooperation with a calm attitude,” Liu said at the opening ceremony of 2019 Smart China Expo in Chongqing, Caixin reported. “We firmly oppose the escalation of the trade war,” he said, adding that it “is not conducive to China, the US and the interests of people all over the world.”

China’s stance now has been referred to as “talking while fighting,” and officials continue to pledge that they’ll meet Trump’s trade measures with their own response even as they stress readiness to negotiate.
China’s retaliatory measures from Friday aim at the heart of Trump’s political support — factories and farms across the Midwest and South at a time when the U.S. economy is showing signs of slowing down. Soybeans and other agricultural goods were targets, as were autos from Daimler AG and BMW AG that are made in the U.S.
Trump tweeted over the weekend that the U.S. “would be far better off” without China, and claimed he could order U.S. businesses to withdraw from the country.
China will follow through with retaliatory measures announced Friday and fight the trade war to the end, after the U.S. failed to keep its promises, the Communist Party flagship newspaper People’s Daily wrote in a Saturday editorial. Later, the Editor-in-Chief of the nationalist Global Times, Hu Xijin, said on Twitter that the U.S. is “starting to lose China.”
Taoran Notes, a blog run by the state Economic Daily, said Monday that Liu’s remarks showed that China is not being “taken hostage by emotions.” At the same time, the blog said that this stance didn’t preclude fighting back.
“If someone continues to misread China’s rational and calm attitude, and holds the illusion that they can continue maximum pressure and China won’t fight back, then China has no other option but to retaliate as in the past.”

Gold steadies as US ratchets down China trade tension
Bloomberg

Gold pared gains after US President Donald Trump said China was willing to resume trade talks, easing demand for the traditional haven metal.
Bullion futures traded down 0.1% at $1,536.40 an ounce after earlier surging as much as 1.8% on the Comex in New York, to the highest since 2013.
Gold has surged this year as Washington and Beijing squared off. The fight is hurting economic growth, boosting the likelihood of additional US rate cuts from the Federal Reserve.
“Gold has demonstrated its safe-haven qualities and we stay long,” Giovanni Staunovo and Wayne Gordon, analysts at UBS Group AG’s wealth-management unit, said in a report before Trump’s latest remarks. UBS raised its 12-month price forecast to $1,650 an ounce from $1,500.
As gold’s rally has gathered pace, investors have pushed into bullion-backed exchange-traded funds, which have hit the highest since 2013.
Holdings are set for a third monthly gain, according to data compiled by Bloomberg.
Gold “should continue to soar” as investors seek havens from trade tensions and further Fed easing, said Helen Lau, an analyst at Argonaut Securities Asia. “Meanwhile, currency depreciation should lead to more diversification away from risk assets in general into gold or gold-related stocks.”