US-China Trade Talks the Main Focus

The Trump Administration early Friday imposed higher tariffs on Chinese goods. Markets will be keying in on any word from talks in Washington between U.S. and Chinese officials. Expectations are the most important meeting may well have been a dinner session between U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He. The situation with the U.S.-China talks swung between pessimism and modest optimism Thursday as the U.S. published the notice in the Federal Register that it was increasing tariffs on $200 billion in Chinese goods. In a statement on Friday, China’s Ministry of Commerce said that the government “deeply regrets that it will have to take necessary countermeasures.” It didn’t specify what those countermeasures might be. President Donald Trump prompted the modest optimism when he declared in comments at the White House that he received a "beautiful" letter from Chinese President Xi Jinping. Trump also commented that a deal could still possibly be reached yet this week. Given the negative response to his aggressive tweets on Sunday and comments earlier in the week on China backtracking on their trade commitments, markets were only moderately supported by the comments. But the expectation is that if the U.S. and China do not reach an agreement or at least agree to withhold taking additional trade actions, the trade situation will extend for another few weeks.