'very strong signals' that China is ready for a trade deal

Irving Hamilton
December 8, 2018

On December 6, the United States reported that its trade deficit in October jumped to a 10-year high, and that the deficit with China that last month surged 7.1 percent to a record $43.1 billion.

The ballooning trade deficit with China is a particularly sore point for Trump, who campaigned on turning around the situation.

-Chinese relations for years.

American farmers have been hit particularly hard by the trade tensions.

He also said that Xi had promised him that the Chinese government would crack down harder on fentanyl shipments from China to the US, and tweeted a quote from a Bloomberg story which said that China was ready to restart imports of USA products, including soybeans and natural gas.

Xu Jianwei, senior China economist from French bank Natixis, said the bigger fall in imports from 21.4 per cent in October pointed to weakness in domestic demand but higher base number from November past year also needed to be taken into account.

The customs data showed that annual growth for exports to all of China's major partners slowed significantly.

The U.S. worldwide trade deficit in goods and services increased to $55.5 billion in October from $54.6 billion in September, according to Census Bureau data.

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The Shanghai composite stock index has fallen by about one-quarter from its January high, while the yuan has slipped about nine per cent against the dollar.

Shipments of Chinese goods on an earlier USA tariff list targeting $50 billion of products have already weakened sharply, but that has been offset by a rush of shipments on a later list affecting the $200 billion, according to analysts from Capital Economics.

But unease over the agreement has dented stocks this week with major United States indices falling more than two per cent to close the market's worst week since March and one that left both the Dow and the S&P 500 in negative territory for the year.

Stirring fears of a reignition of trade tension, the daughter of Huawei Technologies' founder, a top executive at the Chinese technology giant, was arrested in Canada on Dec 1 and faces extradition to the United States, threatening to drive a wedge between the US and China.

Still, Beijing remains outwardly optimistic on prospects for a trade deal.

"China will immediately implement the consensus both sides already reached on agricultural products, energy, autos and other specific items", commerce ministry spokesman Gao Feng said at a regular press briefing.

Trump tweeted out the quote, adding: "I agree!"

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