FT report
Earlier Politico reported that China was pushing to get the Sept 1 tariffs of 15% on $112B of goods removed. Now the FT reports that the administration is ‘debating’ it.
This headlines have lifted AUD, yen crosses and risk trades.
The story cites five sources and says the US wants something in return:
“Washington would likely expect something in return, including beefed up provisions on the protection of intellectual property for US companies, greater certainty on the scale of Chinese purchases of US farm products, and a signing ceremony for the agreement on American soil.”
The report says that there is a growing belief in the US that they will have to make this type of concession but that it was unclear if Trump would sign off.
Watching this story going forward, I’ll be listening for hints on where the signing ceremony is rumored. If it’s in the US, that will be a good sign that a deal along these lines gets done.
At the same time, I’m not sure the market has the right reaction here. I see a deal as 99% priced in and the talk in this story hints at some very big decisions still unmade and plenty of risk that this falls apart.