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Asian equities rebounded on Tuesday as reports that China and the U.S. are in talks to find a mutually agreeable way to reduce the trade deficit gap and avoid the $50 billion tariffs bolstered demand for riskier assets.
U.S. Treasury Secretary Steven Mnuchin reportedly said that he is “cautiously hopeful” that China would reach a deal to avoid tariffs on $50 billion of U.S. exports, adding that the U.S. and China have been in discussion to find a mutual solution regarding the trade deficit between the two countries.
It was reported on Monday that White House officials sent a to-do list to China and requested a tariff cut on imported cars and open its financial service market to the U.S..
In response, Chinese Premier Li Keqiang said the two countries should maintain negotiations and reiterated pledges to ease access for American businesses, although it was also reported that China requested the U.S. to compensate for lost trade due to the metal tariffs, and dismissed the U.S. claims that such tariffs were instituted for national security purpose, and argued they were merely safeguard measures aimed at protecting domestic producers.
The abrupt mood swing came amid reports Chinese and U.S. officials were busy negotiating to avert an all-out trade war.
White House officials are asking China to cut tariffs on imported cars, allow foreign majority ownership of financial services firms and buy more U.S.-made semiconductors, said a person familiar with the discussions.
Chinese Premier Li Keqiang on Monday pledged to maintain trade negotiations and ease access to American businesses.
The United States and China have quietly started negotiations to improve U.S. access to Chinese markets, people with knowledge of the matter said, easing fears of a full-blown trade war between the two economic giants.
The Wall Street Journal reported U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer listed steps that Washington wants China to take in a letter to Liu He, a newly appointed vice premier who oversees China's economy.
China's foreign ministry responded favorably, saying it is willing to hold talks with U.S. officials to resolve their differences over trade.
The behind-the-scenes discussions allayed fear of an escalating trade war, sparked after U.S. President Donald Trump moved to slap tariffs on Chinese goods, on top of import duties on steel and aluminum, prompting a defiant response from Beijing.
Still many investors remained cautious given the high level of uncertainty on where any bilateral negotiations may lead.
President Donald Trump’s recent move to introduce tariffs were not intended to spark a trade war but rather gain leverage to negotiate better trade terms with crucial trading partners.
Global markets were shaken this month when U.S. President Donald Trump moved to impose tariffs on Chinese goods and Beijing threatened to retaliate.
The United States and South Korea agreed on Tuesday to revise their six-year-old trade pact with a side deal to deter competitive currency devaluation by Seoul and with concessions for U.S. autos and pharmaceutical companies.
Focus was on whether the Trump administration would press China for currency reassurances as part of the trade negotiations, like those secured from South Korea.
Fears of a full-blown trade war have eased on hopes that negotiations can bring a compromise, but concerns remained.
President Donald Trump is "obsessed" with Amazon (NASDAQ:AMZN), a source told the news website Axios.
The president is considering targeting the retail giant's tax status or antitrust action.
Trump blames Amazon for the decline of brick-and-mortar retailers and the pain that has caused real-estate developers.
And he thinks the company is getting a free ride from the US Postal Service.
President Donald Trump is "obsessed" with Amazon, a source told the news website Axios, and is eyeing legal means to go after the online retail giant.
According to the Axios reporter Jonathan Swan, Trump believes Amazon is a negative force for smaller, locally owned retailers and wants to find a way to curtail the company's dominance in online shopping. According to Axios' sources, he is considering a change to Amazon's tax status or a crackdown down through antitrust rules.
The Supreme Court is already considering a case that could give states more power to collect sales tax on online retailers.
While Amazon already imposes the applicable state sales tax on goods it sells, when a third-party seller uses the platform, it is up to that seller to collect sales tax. Many third-party sellers on Amazon do not collect those taxes.
Trump hasn't been shy about his distaste for Amazon and its CEO, Jeff Bezos, previously tweeting that the retailer is hurting the US Postal Service and attacking Bezos for his ownership of The Washington Post.
"Amazon is doing great damage to tax paying retailers," Trump tweeted in August. "Towns, cities and states throughout the U.S. are being hurt - many jobs being lost!"
This message was edited by ferari on 29-Mar-2018 @ 2:00 PM