Trump sees 'good possibility that a deal can be made'.
Weaker profit growth and PMI underline Chinese slowdown.
Taiwan's pro-independence government suffered big defeat at 'mid-term' elections.
Trump sees 'good possibility that a deal can be made'
It's finally crunch time for Donald Trump and Xi Jinping as they face off at the dinner scheduled for Saturday evening after the G20 gathering. While signals from Trump have been mixed over the past week, the latest message before he left for Buenos Aires was one of cautious optimism. He said the two sides were 'very close' to a deal and added 'I'm open to making a deal, but frankly, I like the deal we have now' referring to the current situation with tariffs on China, see Bloomberg . Earlier this week, Trump's economic adviser, Larry Kudlow, said at a press conference that Trump saw a 'good possibility that a deal can be made'... and that he's 'open to it' if certain conditions are met, see CNBC .
On Friday, the Financial Times reported that officials have begun to plan for follow-up negotiations in case Xi and Trump agree on a truce. In this case, a delegation of 30 officials led by China's economic tsar Liu He could be going to Washington for 12-15 December.
Yesterday, it was reported that ultra-hawk on China, Peter Navarro, will also participate in the dinner meeting, contrary to rumours earlier this week.
Comment: We still see a 60% chance that Trump will opt for a ceasefire deal that includes a plan for further negotiations. Trump may condition abstaining to raise tariff rates from 10% to 25% on 1 January, on how big the concessions from China are at negotiations in mid-December. If Trump chooses further escalation over negotiations, it could backfire, as it would increasingly hurt the US markets and economy. For more details, see US-China trade - Five reasons why we still see 60% chance of ceasefire , 29 November 2018.
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