12.20pm: ING analysts cautious on trade deal chances

12.20pm: ING analysts cautious on trade deal chances
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FTSE 100 up 35 points China offers partial trade deal to US EU prepared to throw Brexit deal lifeline While the news of a potential small trade offer from China has provided some optimism for the markets, analysts at ING remain cautious, saying there is “scant evidence” that the two sides will be able to move enough to break the current deadlock. The Dutch bank said that despite positive signals in the recent news cycle, the chances of a deal happening quickly were “low” as Donald Trump would need to remove some of his demands on China and had already said he did not want to strike a ‘mini deal’ with Beijing. “We think it’s possible that a further deterioration in the US economy could lead Trump to take a few steps back, but he has to walk a fine line. Trump won’t want to give in so much that he’s viewed as a loser in the trade war”, ING said. “He recently said he still wanted a broad agreement rather than something narrower in scope. Trump is feeling the pressure from Democrats and hard liners within his own party to remain tough on China and push for more than just a deal on trade flows.” “But this gives him little room for manoeuvre since China is adamant it will not give up its sovereignty in setting industrial policy objectives or its autonomy in granting direct or indirect state subsidies to Chinese firms. For China, it’s also unacceptable that […]

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