Both criticism of and support for President Trump’s tariffs have been bandied about over the last year. Warnings about a coming recession have been countered with the explanation that the president is playing the long game with the goal of getting the U.S. out from under the economic thumb of China. While Wall Street has reacted positively, for the most part, to the trade war, the market has also taken investors on several roller coaster rides. With the announcement of the upcoming trade talks in early October between the two countries, economic optimism is in the air. And that optimism is buoyed by reports that China insiders believe that the upcoming talks could lead to a “breakthrough.”
In a tweet, China Communist Party insider Hu Xijin wrote, “China and the US announced new round of trade talks and will work to make substantial progress. Personally I think the US, worn out by the trade war, may no longer hope for crushing China’s will. There’s more possibility of a breakthrough between the two sides.”
China and the US announced new round of trade talks and will work to make substantial progress. Personally I think the US, worn out by the trade war, may no longer hope for crushing China's will. There's more possibility of a breakthrough between the two sides.
— Hu Xijin 胡锡进 (@HuXijin_GT) September 5, 2019
As CNBC reports, Xijin’s tweet not only holds good news for the future but also good news regarding immediate economic gains because his Twitter account “has been followed by many Wall Street traders and market participants for insight on the trade war.” The market is already responding positively with early gains being reported.
CNBC adds that the popular Chinese blog Taoran Notes, that has its finger on the trade war’s pulse, wrote yesterday of the talks that “new developments” are “very likely.” According to CNBC, the same blog post pointed to a statement made by China’s Ministry of Commerce that they are expecting “meaningful progress” to be made during the upcoming talks. It should be noted that Taoran Notes is run by a state-owned newspaper.
It’s too early to predict with confidence what the talks will produce, but early reports are encouraging.