Trade Uncertainties Linger Amid Cancellation of APEC Meeting

Trade Uncertainties Linger Amid Cancellation of APEC Meeting

According to recent reports, US President Donald Trump said that they are ahead of schedule to sign phase one of the trade deal with China counterparts, which spiraled optimism towards the prolonged trade war between the US and China. President Trump and Chinese Premier Xi Jinping were expected to sign the deal during the November 16-17 Asia-Pacific Economic Cooperation (APEC) summit in Chile. However, Chilean officials on Wednesday reported that the summit would be canceled due to violent protests in the country while heightening trade uncertainties in the market.
 
Hopes remain in the market after US Treasury Secretary Steven Mnuchin declared that the phase one trade deal is still expected to go on within the same time frame; however, further details on the statement were absent.

Recent compromise from both sides, with the US delaying the tariff hike on October 15 as a sign of goodwill, and China’s promises towards US agricultural products purchases showed the eagerness on both sides to put the trade war to an end. Furthermore, negotiators from both sides, namely Robert Lighthizer from the US and Liu He from China, are providing the market with confidence, stating that ongoing negotiations are very constructive and progressive.

Market’s focus will now be placed on alternative suggestions on how the two economic powerhouses’ leaders will meet to sign the deal, and carrying on with phase two and three. Time is also running out as the next US planned tariff on Chinese imports on December 15 draws closer. Analysts argued that if the US were very determined to end the trade war, the tariff could easily be deferred or removed entirely.
 
More to come ahead, and with Brexit headlines temporarily out of the picture, the trade war will be the main driver for the market, especially for safe-haven assets, DXY, Asian pairs, and oil markets as well.