WASHINGTON, November 28 -- A trade deal is unlikely between the U.S. and China when President Donald Trump meets his Chinese counterpart on the sidelines of the Group of 20 summit in Buenos Aires later this week, majority analysts polled by International Business Times said.
More important, 14 of the 15 analysts polled do not see the U.S. and China hammering out a trade deal before Dec. 31, or for that matter, within the next six months. Only one analyst expects a deal before the year-end. But the analysts say any optimistic vibes from the meeting could lead to some positive steps on tariffs, although not an outright deal, that could keep the heat of the trade war from rising further. They see a positive meeting between Trump and Xi leading to the U.S. agreeing to hold off on raising tariffs on $200 billion of Chinese goods, from 10 percent to 25 percent, as scheduled on Jan. 1, 2019. Yung Yu-Ma, the chief investment strategist at BMO Wealth Management, said the “likelihood of an actual deal is very low” at the G20 Summit, adding it is more realistic to expect “some positive statements about both sides coming closer to an agreement or continuing negotiations.” “If there are such positive statements, then probably (there is) a 60 percent chance of postponement of tariff increases while negotiations take place,” he said. “If no such positive statement, then probably only a 20 percent chance of postponement.” Ryan yan Sweet, director of real-time economics at Moody’s, echoed the view. He said the two sides could reach a “partial trade agreement” at the G20 summit and “agree not to further increase tariffs while they iron out the other sticky points.” The analysts say the standoff between the U.S. and Chinese delegations at the recently concluded Asia-Pacific Economic Cooperation (APEC) meeting has diminished the prospect of a deal at the upcoming G20 meeting. For the first time in APEC’s 25-year history, the 21 participant countries failed to come up with a joint statement because they could not arrive at a consensus over a paragraph on trade. Luc Vallée, chief strategist at Laurentian Bank said “the probability of a short-term deal appears lower than ever. It does not mean that a deal is impossible, nor that extra tariffs by the U.S. on Chinese goods will be enacted next January. Negotiations will continue for a while and only if there is a dead-end, expect 25 percent tariffs on the entire $530 billion (Chinese) exports.” Chief economist Brian Wesbury at First Trust Advisors is the lone analyst among the 15 who expects a deal before the year-end. But even he does not see a deal at the G20 summit because “it seems China is willing to comply with U.S. requests quietly, rather than publicly.”
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