Published: Wed, May 23, 2018
Sports | By Phillip Butler

US, China nearing deal to remove US sales ban against ZTE

US, China nearing deal to remove US sales ban against ZTE

ZTE has been forced to halt major operations after the US slapped a ban on China's second-largest maker of phone networking equipment for violating a settlement on breaching sanctions and then lying about it.

"We are not out of the danger zone yet", said Nick Marro, a China analyst with the Economist Intelligence Unit.

"Secretary Mnuchin updated President Trump on the Treasury Department's progress", the spokeswoman said in an emailed statement.

USA indices opened on the front foot, with the Dow Jones Industrial index leading the charge with a 300 point gain in early trade as investors' fears about a trade battle between the U.S. and China faded. That is far less than the $200 billion reduction in China's trade surplus that Trump demanded at the start of talks.

The people, who declined to be identified because the negotiations were confidential, also said the deal could include China removing tariffs on imported USA agricultural products, as well as buying more American farm goods. Trump wrote on Twitter on Monday.

After three days of talks that concluded Saturday, China and the United States issued a vague joint statement saying that China would increase its purchase of us goods and services and that talks would continue in China to flesh out the details.

The aerospace group is one of the US's largest exporters and China is a pivotal market, so its investors were pleased by the succesful progression of China-US trade negotiations.

Questions also remained over the administration's handling of ZTE. China counterpunched with tariffs on USA products, rattling the market. China hasn't said how much it's willing to reduce the US trade gap. Negotiations are now behind closed doors, so it's unlikely we'll learn much more about this deal before it is settled.

On Sunday, Mnuchin said the president was not "going easy" on China with regard to ZTE.

"If the governments of the two countries reach a good agreement and results that are acceptable to both, they should stick to the agreement".

Some analysts say that for now, Trump might have wanted mainly to smooth over relations with China before his planned June 12 meeting with North Korean leader Kim Jong Un.

FILE PHOTO: Containers are seen at the Yangshan Deep Water Port in Shanghai, China April 24, 2018.

The official China Daily said everyone could heave a sigh of relief at the ratcheting down of the rhetoric, and cited China's chief negotiator, Vice Premier Liu He, as saying the talks had proved to be "positive, pragmatic, constructive and productive". "Instead, it stood firm and continually expressed its willingness to talk", the English-language newspaper said in an editorial.

Still, President Donald Trump framed the weekend's talks as a clear victory for the U.S. Mr. Trump said in a tweet that "Fair Trade, plus, with China will happen!"

The market is also weighing the possibility of additional USA sanctions on the country.

Lovely, the Syracuse economist, said the US was distracted by an "ill-advised focus" on the trade deficit.

Early in the trading session, the Big Board pared down some of its gains, but still managed to add 276 points, led higher by Intel, General Electric, Boeing and Caterpillar, which all posted gains of more than 2%. The dollar also gained against a basket of currencies.

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