As trade talks between the USA and China unfold in Washington, a series of conflicting news reports have thrown markets into confusion, with U.S. and Asian futures indexes briefly dropping upon news the talks had ended in failure.
Without significant progress, Trump is set to increase the tariff rate on $250bn worth of Chinese goods to 30 percent from 25 percent next Tuesday.
Surprised and upset by the USA blacklisting of Chinese companies, China has lowered expectations for significant progress from this week's trade talks with the United States, Chinese government officials told Reuters, even as President Donald Trump on Wednesday expressed fresh optimism. The Australian dollar strengthened overnight against the USA currency partially due to market speculation about a potential United States currency pact with China to stop devaluation. "We had a very, very good negotiation with China".
With expectations for this week's talks low, Trump said in a tweet Thursday: "Big day of negotiations with China".
China is willing to bump up purchases of United States farm exports and make other concessions but will stop short of addressing Trump's core grievances, according to reports from Bloomberg and The Financial Times.
"I don't think the administration should be afraid of a partial deal", he told CNBC, adding that a bargain that came with some structural reforms to China's economy could leave Trump with enough leverage to pursue more reforms down the road. The focus point of the talks is expected to be whether Beijing will agree to expand imports of USA agricultural products to try and delay the tariffs.
Both sides were due to dine together on Thursday evening.
"Big day of negotiations with China", the president wrote on Twitter.
Earlier this week, Washington increased pressure on Beijing over its treatment of China's Uighur Muslim minority by announcing commercial and visa restrictions. It remains to be seen what deals - or lack of them - might result, however for the moment it appears markets have settled on a cautious optimism.
A senior U.S. Chamber of Commerce official said U.S. and Chinese negotiators were working towards an "early harvest" of confidence-building agreements, including one to avoid currency manipulation.
"We all know we can't afford a further escalation of the trade war", Brilliant said.
"Every month that these trade talks continue, there's more and more friction in the relationship".