Ongoing discussions between the two economic superpowers is certainly better than no discussions at all.

“Because there have been really no substantive negotiations over the last several weeks or months, at most, there might be an agreement for the president to withhold further tariffs, not adding to the tariffs already imposed on some $250 billion worth of goods coming from China, in exchange for discussions over the next several months,” said Gary Locke, former U.S. ambassador to China.

3. Meeting in the Middle

With the trade war reaching an impasse for both nations, meeting in middle on their differences could produce a substantial trade agreement that’s beneficial for both sides–of course, this would be the best-case-scenario option for investors.   For the U.S., it means China will need to agree to more flexible policies regarding market access and stronger intellectual property protection.

“At present both countries economic teams are maintaining close contact to put into effect the spirit of the consensus reached by the two leaders in their telephone call on Nov. 1,” said Foreign Ministry spokesman Geng Shuang at a news briefing.

“We hope the U.S. can show sincerity and meet China half way, to promote a proposal that both countries can accept,” Shuang added. “At the same time we also hope that with the hard work of both sides, the Argentina meeting that will shortly take place between the leaders of China and the United States can achieve positive results, to set the direction for the next stage in the development of China-US ties.”

For more trends in fixed income, visit the Rising Rates Channel.

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