Will Trump get China deal wrapped up in time for Christmas?

DONALD Trump re-affirmed on Wednesday that US-China negotiators are in the "final throes" of a phase one trade deal. Yet, while financial markets have been buoyed by mounting signals of an agreement, this is still by no means "in the bag", especially with bilateral differences over Hong Kong potentially upsetting the applecart.

Optimism has risen recently not just with Mr Trump's comments, but also the fact that China's annual Economic Work Conference is expected to convene in December which some commentators suggest is a further sign that a deal is imminent. There are potentially reasons for both sides to move ahead before Christmas: Mr Trump would have a deal to try to crow about as he enters into his re-election year, while China wants to demonstrate economic stability after continued political unrest in Hong Kong, and a flurry of sub-par national economic data, including the news that industrial profits fell by 9.9 per cent in October year on year according to the National Bureau of Statistics.

A further incentive to move before Christmas is that the next tariff deadline falls on Dec 15, after which additional US levies on Chinese exports are scheduled. This would see a 15 per cent rate applied to a further US$160 billion worth of Chinese goods.