On Thursday, U.S. President Donald Trump announced that he has no intention to meet with Chinese President Xi Jinping before the March 1st deadline by which the two countries must reach a trade deal. This unfavourable development has certainly raised concerns over trade talks dragging on beyond the 90-day tariff truce.
Depending on how those trade talks go, Trump may take a meeting with Xi "shortly" after the deadline.
Trump and Xi agreed to a a 90-day truce at a G20 summit in Buenos Aires, Argentina on November 30 previous year.
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The United States has threatened to more than double existing tariffs on Chinese goods at the start of March if there is no agreement on measures to reform China's trade practices, which Washington says are deeply unfair. U.S. Trade Representative Robert Lighthizer is pressuring Beijing to make structural changes that would bring an end to policies that force U.S. companies to hand over technology or intellectual property as a requirement for doing businesses in the country.
The main delegation also includes David Malpass, whom President Donald Trump has nominated to be president of the World Bank and who has worked to limit the bank's assistance to Beijing.
White House economic adviser Larry Kudlow told reporters that the leaders of the two economic superpowers could still meet at a later date. Treasury bond yields dropped as investors sought safety in sovereign United States debt.
Meanwhile, the U.S. has threatened to increase tariffs on $200 billion worth of Chinese goods to 25 per cent from 10 per cent if a deal is not reached by March 2.
The United States is pressing China to make major reforms, including on structural issues related to how it treats USA companies doing business there.
The US stock market has fallen in response to the news, with hopes of a swift trade pact between the two leaders quickly dampened.
While China has offered to buy more U.S. soybeans and beef, officials have yet even to agree on a draft of a deal that would address key USA concerns, according to media reports.
Treasury bond yields dropped, while the benchmark 10-year yield slid 4 basis points to a low of 2.66%.
It's not clear what will happen if a trade deal isn't struck by the deadline. They include US demands that China boost imports of USA products, and Chinese government and corporate pressure on US firms to transfer their technology to Chinese partners.
Trump has vowed to increase USA tariffs on $200 billion worth of Chinese imports to 25 percent from 10 percent now if the two sides can not reach a deal by 12:01 a.m. (0501 GMT) on March 2.
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