US President Trump and Chinese President Xi Jinping meeting is important - Rabobank

Research Team at Rabobank explains that tomorrow and Friday’s meeting between US President Trump and Chinese President Xi Jinping will be very important and trade policy will likely be the hot potato, after Trump has repeatedly blamed China for the US trade deficit and loss of US jobs.

Key Quotes

“In addition, Trump continues to accuse the Chinese government of keeping the renminbi at artificially cheap levels, and he is pushing to get the country on the US’ official list of currency manipulators. Perhaps the success of the meeting will all come down to that Kodak moment between Messrs. Trump and Xi, which is not necessarily a re-assuring thought either.”

“Whilst China might be able to appease Trump with promises of further liberalisation and increased openness to trade into China, it is highly uncertain whether the Chinese president is willing to offer sufficient concessions to convince Trump. Failure to come to a mutually-beneficial understanding could mark the start of US-China trade frictions and uncertainty in markets.” 

“Potential setbacks in the areas of both trade and domestic policy therefore risk the US reflation trade running out of air.”