Possibility of a meeting between the American President Donald Trump and the Chinese President Xi Jinping in November, has lifted Dow Jones industrial average for the second straight day. Dow Jones has been suffering for a while now pertaining to the trade war between America and China.
The Fridays report on the possible meeting comes from the Treasury and according trade pundits, such reports should not be considered unless they come from the Trump itself or from the Office of the U.S. Trade Representative. There is a little going on from the Trump’s Administration to end the trade war and thus far, Treasury Secretary Steven Mnuchin seems to be losing.
Most people believe that the first step to start a serious dialogue with China is to reduce Trump’s tariffs. This is because, starting this August 23, $16 billion worth of Chinese imports are going to suffer from Trump’s 25% tariff and Beijing is all set to hit back with the same intensity.
In addition to this, from September 5, another $200 billion worth imports will be hit by the Trump’s proposed 25% tariff. This will even worsen the present trade war between the two most economically powerful countries.
Initially people thought the China was making use of Qualcomm (QCOM) as a means of trade war by obstructing the company’s acquisition of NXP Semiconductors (NXPI). But when Trump intervened by softening the sanctions, everyone thought it was a done deal. However, China refused to relent and Qualcomm has to finally give up. China’s growing ambitions to become the global leader in the field of technology is making it play the hardball.
Finally, according to the analysts, since the China trade war is now at its peak, an outcome may soon become predictable in the coming weeks and it would be safer for the investors to wait until then.
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