Forex

Trump Administration says tariffs will not be rolled back on Chinese goods

  • President Trump says he has no plans of rolling back tariffs on Chinese goods.
  • Trump suggests Iowa as the venue to sign the phase 1 deal with President Xi Jinping.
  • Stock market, EUR/USD, and GBP/USD under pressure following Trump's announcement.

In recent weeks, statements from the U.S and Chinese representatives stirred up the optimism regarding a trade deal. The President of the United States of America, Donald Trump, however, stated earlier this morning that he has no plans of rolling back the tariffs on Chinese goods. As per the financial analysts, Trump’s announcement contributed to scrapping the optimism for a broader trade deal between the two parties anytime soon.

China Is Pushing The U.S To Roll Back Tariffs

President Trump further added that it’s a priority for China to have the tariffs rolled back. The U.S government, however, has not agreed to any such clause so far. Following the statement, the stock market was reported to have dropped to its daily low.

Trump’s statement has fueled uncertainty in the financial markets since it is in contradiction with Gao Feng’s (Chinese Commerce Ministry representative) remarks that the two largest economies of the world have agreed to dissolve the additional duties on the products. According to CNBC, however, the duties that are to be removed were not quantified.

The U.S Trade Representative (USTR), Robert Lighthizer, had commented earlier in October that a phase 1 deal between the United States and China was near completion. Trump Administration was further highlighted to have secured an increased purchase of American agricultural products by Chinese firms. Matters of gravity like forced technology transfers and intellectual property theft were to be discussed at a later stage of the trade deal, as per the announcement.  

Phase 1 Deal Is Expected To Be Signed Later This Month

The phase 1 deal between the United States and China was to be signed at the Asia-Pacific Economic Cooperation conference at the end of November in Chile. Due to the ongoing protests, however, the president of Chile recently canceled the conference. Donald Trump and Chinese President Xi Jinping are now on a lookout for a new venue to sign the agreement. President Trump also suggested a meeting with Xi Jinping in Iowa to sign the agreement later this month.

Two of the major currency pairs, EUR/USD and GBP/USD have been under pressure on Friday. EUR/USD has printed a loss of 0.23% for the day and is currently trading around 1.1018. Cable, on the other hand, has noted a 0.30% drop on Friday and has broken below the 1.28 level. The pair is currently trading at 1.2786. The U.S dollar index also caught steam and hiked above 98.00 level again. The index is currently trading at around 98.227.

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