Mnuchin insists United States reached 'fundamental agreement' in China trade talks

Mnuchin insists United States reached 'fundamental agreement' in China trade talks

Mnuchin insists United States reached 'fundamental agreement' in China trade talks

The president quickly hyped a potential win in China buying $40 billion to $50 billion in agricultural products from struggling USA farmers.

That could see it export more than $1 billion in beef to China, he said, or ten times the current level, but it could take a year or two to ramp up those supplies.

The drop in trade activity was steeper than economists had predicted as the ongoing trade war with the USA continues to hit China's economy. Stocks initially moved higher on the news, but then reversed course and continue to trade with a downward bias on Monday.

Trump will hold off on more tariffs. For now, though, indications on trade are a little more positive.

Fox Business host Maria Bartiromo criticized President Donald Trump's administration for "overselling" a new trade agreement with China, arguing that "the Chinese got what they want" while the USA got very little in return. Christiaan Tuntono, senior economist for Asia Pacific at Allianz Global Investors, told CNBC there are some significant issues to overcome, such as "more sensitive areas" like cybersecurity, currency manipulation, and Chinese companies that have been blacklisted from doing business in the U.S.

The high-level trade talks were held ahead of Washington's planned increase of trade tariffs on $250 billion worth of Chinese goods from 25 percent to 30 percent starting 15 October.

Globally, China's exports dropped 3.2 per cent in September from the same period previous year, while imports dived 8.5 per cent, according to data from the customs administration. China and the United States have slapped each other with hundreds of billions of dollars in tariffs since the current trade war began between the world's two largest national economies in 2018.

So, why bother pulling the trigger on expensive new equipment?

Treasury Secretary Steven Mnuchin said Monday morning that he expected those tariffs would still be applied if the US and China had not reached a final deal by then. "That's about it that the US got, and the agricultural products".

Notably, some of the thorniest issues - such as USA allegations that China forces foreign companies to hand over trade secrets - were dealt with only partially, or not at all, and will require further talks. That didn't come to pass, however.

"I expect we'll have a deal", Mnuchin said, adding that it was "subject to documentation".

"We've reached a fundamental agreement".

Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance.

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