Experts are anticipating the ongoing rally in commodities prices to continue in coming months, regardless of investor anxiety of the result of U.S.-China trade war.
Trump imposed tariffs on $250 billion of Chinese imports last year in a command to require China to change the method it does business with the rest of the world and to pry open more of its economy to U.S. business.
Though his blunt-force usage of tariffs has affronted many, his push to change what is extensively considered as China’s market-distorting trade and aid methods has drawn broad support.
Lobbyists, company executives, and U.S. legislators from both sides of the aisle have advised Trump to not settle merely for Beijing’s offers to make big-ticket purchases from the United States to help in overcoming a record trade deficit.
Trade conversations between China and the United States began with a working dinner in Beijing on Thursday night as negotiators lost no time attempting to accelerate the high-stakes conversations over trade, products and more.
U.S., China move forward in trade deal
The United States delegation led by trade representative Robert Lighthizer and Treasury Secretary Steven Mnuchin showed up in Beijing on Thursday for the latest round of discussions focused on establishing sticking points at the center of the continuous US-China trade war.
U.S. Treasury Secretary Steven Mnuchin stated in a tweet on Friday that he and U.S. Trade Representative Robert Lighthizer had concluded “constructive” trade talks in Beijing.
China’s commerce ministry spokesperson Gao Feng stated, “Although some progress have been made during the telephone negotiations between Vice-Premier Liu He and his US counterparts, there are still lots of work to do.”
Amongst Trump’s requirements are for Beijing to end practices that Washington claims which lead to the systematic theft of U.S. intellectual property and the required transfer of American innovation to Chinese business, in addition to unjust trade practices in the commodities sector.
U.S. business say they are compelled into turning over technological secrets to Chinese joint venture partners, regional officials or regulators as a stipulation for doing business in China.
The U.S. federal government says that innovation is often consequently moved to and employed by Chinese competitors.
The problem has proved a hard one for arbitrators as U.S. authorities state China has rejected that the issue exists to the level declared by the United States, making talking about a resolution difficult.
China says it has no innovation transfer requirements preserved in its laws and any such exchanges are a result of genuine arrangements.
Favorable sentiment continues for commodities
A rebound in commodities prices and financial investment is likely to extend in the coming months as the sector gets its traditional increase during the last stages of the global economic cycle in addition to other drivers.
While some investors worry over a possible economic downturn, commodities will likely benefit because from an anticipated U.S.-China trade settlement, tightening up oil supply and potentially covering short positions in downtrodden U.S. grain futures.
The increase in commodities so far has been partly fueled by a desire for a contract to end a trade war in between Washington and Beijing, helping to stimulate $2.1 billion into the commodities index funds and exchange-traded funds.