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What's Next For US And China Trade Talks?

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What's Next For US And China Trade Talks?
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United States and Chinese trade officials gathered Jan. 7-9 to discuss ways to "achieve fairness, reciprocity, and balance in trade," a U.S. statement said Wednesday. The U.S. trade delegation will now report back to senior levels of the government to "receive guidance on the next steps."

Will Trump Accept A Bad Deal?

President Donald Trump's deal-making persona could in theory result in him accepting a bad deal with China and many "China hawks" in his administration have this concern, Peter Trubowitz, professor of international relations at the London School of Economics, said on "Bloomberg Surveillance."

Alberto Gallo, portfolio manager at Algebris Investments, said it would be hard for China to maintain any agreement "beyond a level of promise" it makes on intellectual property and opening its markets. On the other hand, China can agree to certain financial stability measures, including how it manages the yuan.

Is Chinese Car Sales Data A Notable Datapoint?

For the first time in more than two decades, car sales in China fell and this has some wondering if it's related to the ongoing trade dispute with the U.S.

Michael Shaoul, CEO and portfolio manager at Marketfield told Bloomberg he isn't convinced car sales data in China is related to trade. Instead, declining car sales can be attributed to China going down "two paths last year" where its central bank was tightening internally and then reversing its tightening and this could have some impact on consumer demand in 2019.

Vincent Reinhart, chief economist and macro strategist at Standish Mellon, doesn't necessarily agree. He said concerning data out of China extends beyond just car sales and include the central bank lowering reserve requirements over the weekend, which implies a "new source of stimulus."

OPEC Weighs In

The potential for an escalation in trade war between the U.S. and China could result in hardships between the two countries, outgoing OPEC head Suhail Al Mazrouei told CNBC's Hadley Gamble. He remains optimistic current "negotiation tactics" are exactly that and will lead to a resolution "this year or next year."

Is 5G On Track For 2019 Rollout?

The rollout of 5G communication technologies is in the very early stages with China's Huawei, a major developer of 5G equipment, being "blocked out" of the U.S. and other countries, Bob O'Donnell of TECHnalysis Research told CNBC. There isn't reason to believe the ongoing trade talks between the U.S. and China will delay the global 5G rollout as it creates an opportunity for other global companies, such as Samsung, to play a bigger role.

Even if the U.S. government places a tariff on future 5G smartphones from China, it's unlikely to impact consumer demand as the price tag on the next generation phones will already be "significant" to start off, he said.

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