U.S. markets moved in a tight sideways range today with the Dow closing down 0.11%, the S&P 500 down 0.14% and Nasdaq down 0.1%.
Kelsey Broderick, China analyst with Eurasia Group, appeared on CNBC on Monday, saying there was a lot of fanfare coming out of the press conference last week.
“A lot of celebration,” Broderick said. “And then you had Chinese state media immediately temper the excitement by saying, you know, number one this is not a plan, and number two this is not really even an agreement. What we have here is just a foundation to work towards some kind of a plan to be signed on November 16 or 17th. So really those comments from China signaled that they are perhaps not on the same page as the US, in terms of how much has been decided. And we’re still in for a relatively long process while they negotiate out the last few weeks of this agreement.”
While the trade deal may be delayed as the two countries struggle to iron out what is fair for each of them, the more important development could be the fact that the U.S. seems to now be creating a longer term division between the two nations, according to one expert.
“I feel like that unless there is some truly dramatic exogenous development, e.g. Hong Kong blowing up, some Taiwan crisis, or a really big downturn in this US economy, I think that it’s quite possible that this formal trade talks track of US China policy could go on quite a while longer,” said Alan Tonelson, founder of RealityChek. “We might see announcements of more preliminary deals, mini deals, phase 1.5, whatever President Trump chooses to call it. But what I think was just as important, and probably more important, is that track two of Trump’s China policy is very much alive so far. And that is what I would call the US-China decoupling track. The administration continues to take further steps to make sure that the United States keeps on disentangling itself from China’s economy. And I think that’s been President Trump highest priority all along, even though he doesn’t talk about it very much.”
“Even the financial Times editorial board last week called for more American support to build of European alternatives to Chinese telecom companies. I was astonished by that and everyone else should be too,” Tonelson added.
Watch the CNBC segment ‘It will be difficult for US and China to reach an agreement, says analyst’ below:
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