Trump Flags End To China Trade War As Stocks Dive

WASHINGTON DC- OCTOBER 31 US President Donald Trump, speaks while flanked by Director of the National Economic Council Larry Kudlow during an event for American workers in the State Dining Room of the White House

Donald Trump Stock Market Will Suffer if Democrats Seize Control in Congress Mark Wilson Getty Images 31 Oct 2018

Trump said he will discuss trade with Xi when the two meet for dinner on the sidelines of the G20 leaders' summit at the end of November in Buenos Aires, Argentina.

"This is pre-election hype created to make the markets happy; there is no imminent deal with China", Greg Valliere, the chief global strategist at Horizon Investments, told Business Insider.

The event will be closely watched for any progress in the resolution of the bitter trade dispute between the world's two largest economies.

On Thursday, comments made by Mr Trump appeared to be an attempt to ease tensions.

"The two countries' trade teams should strengthen contact and conduct consultations on issues of concern to both sides, and promote a plan that both can accept to reach a consensus on the China-US trade issue", Xi told CCTV state television.

President Donald Trump teased a prospective trade deal with China on Friday, but many analysts are skeptical the trade war is going to end anytime soon.

Shi also said he thought China had only a limited role to play on the North Korea issue.

The two countries have been locked in an escalating trade war this year, with each side imposing tariffs on hundreds of billions of dollars' worth of imports from the other.

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Hours later, however, the US Justice Department accused another Chinese firm of unfair practices, part of an across-the-board pressure campaign by the Trump administration targeting China.

Analysts were mixed on the significance of Trump's latest move, with some viewing it as a positive sign of a breakthrough and others seeing it as a ploy to boost market sentiment ahead of midterm elections next week. "We don't know what the tariff rate might be", he said.

Tensions have increased in recent months with U.S. officials accusing China of meddling in the USA midterm elections, conducting cyber espionage and military aggression.

The United States has imposed tariffs on US$250 billion worth of Chinese goods, with duties on US$200 billion of the total set to increase to 25 per cent from 10 per cent on Jan 1, 2019.

The telephone conversation on Thursday was Trump and Xi's first publicly disclosed call in six months.

The two countries have imposed tariffs on hundreds of billions of dollars of each other's goods and Trump has threatened to put tariffs on the remainder of China's US$500 billion-plus exports to the United States if the disputes can not be resolved.

The comment comes days after he warned he would impose tariffs on all China's shipments to the United States before saying he thought he could "make a great deal with China" but it was not yet ready.

Both the U.S. and China have sought to portray the personal relations between the two leaders as a source of stability in the relationship, and they have refrained from direct criticism of each other.

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