US President Donald Trump said on Monday that trade talks with China were under way and any deal would need to be somewhat tilted in favour of the United States.
Presidents Donald Trump and Xi Jinping hit the reset button in their trade negotiations over the weekend at the Group of 20 meeting in Osaka, Japan, after the last major round of negotiations collapsed in May. On Saturday, Trump said the U.S. would hold off for the time being plans to impose new tariffs on $300 billion in Chinese goods. The move still leaves 25% import taxes imposed by the U.S. on $250 billon of Chinese imports in place, however. And China maintains the tariffs it placed on $110 billion in American goods, primarily agricultural products. Trump also said he would allow U.S. companies to sell some components to Chinese telecommunications giant Huawei, which last month was placed on an American blacklist as a threat to national security.
Investors also turned their focus to China's domestic factors, as they watched if Beijing could temper stimulus measures given the trade truce. China's economy is likely to hit its growth target this year provided a bitter trade dispute with the United States does not worsen, and hence will not need "very big" stimulus measures to prop up growth, a central bank adviser said on Monday.
China's factory activity shrank more than expected in June, an official manufacturing survey showed, highlighting the need for more economic stimulus as US tariffs and weaker domestic demand ramped up pressure on new orders for goods.
CURRENCY NEWS: China yuan eased against greenback on Tuesday. Prior to market opening, the People's Bank of China (PBOC) set the yuan's midpoint rate at 6.8513 per dollar, 0.3% lower than the previous fix of 6.8716. In the spot market, onshore spot yuan was changing hands at 6.8636 per dollar, weaker by 0.15% than the previous day quote of 6.853 per dollar.
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