Equity index futures plunged overnight after a report out of the South China Morning Post said deputy-level trade talks between the U.S. and China, which were meant to lay the groundwork for high-level talks in Washington, D.C. over the next two days, have stalled. According to the report, the Chinese delegation refused to negotiate about forced technology transfers as well as state subsidies, which the Trump administration says give Chinese companies an unfair advantage over international competitors.
How long Chinese Vice-Premier Liu will remain in the capital is also up in the air. The report said he may leave early, cutting off the second day of scheduled talks. However, the White House refuted the change in the Vice-Premier’s travel plans.
Yesterday, the New York Times reported the Trump Administration is planning on allowing some U.S. companies to sell non-sensitive products to Huawei, the Chinese tech giant blacklisted in May for national security reasons. Earlier this week, 28 more Chinese companies were added to that blacklist. Markets have recovered somewhat as Wall Street gets closer to the open, but it’s questionable how long they can hang on without positive developments in the Trade War.
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