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Danske Bank analysts point out that they are still waiting for the date of the meeting between Xi Jinping and Donald Trump, at which they are set to sign a trade deal.  

Key Quotes

“High-level trade talks will resume in Beijing next week with the aim of closing a deal soon.  US Trade Representative and Treasury Stephen Mnuchin is set to lead US talks with China’s top negotiator Vice-Premier Liu He and his team and the following week the Chinese high-level trade team is planned to head for Washington. According to some sources, the hope is to pave the way for a ‘signing summit’ between Xi and Trump in late April.”

“Trump generated more uncertainty about the talks this week,  saying  “We’re not talking about removing them [tariffs], we’re talking about leaving them for a substantial period of time, because we have to make sure that if we do the deal with China that China lives by the deal.”

“A report by the US Chamber of Commerce and the Rhodium Group put a price tag for the trade war on the US at USD1trn  (assuming tariff rates are not removed).”

Comment:  We still see a very high likelihood that a deal will be closed within the next three months  , despite the rising hurdles at the end of the trade talks. Trump needs a deal to set the stage for his election campaign, where he will be able to present significant gifts to key voters in the agricultural heartland as well as strong support to stock markets and the economy.”