Trump also expects that this meeting should go very smoothly.
Trump posted on Friday that his three cabinet officials will meet with Chinese representatives in London next Monday to discuss the trade agreement. The U.S. side will be represented by Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross, and Trade Representative Robert Lighthizer.
First, the meeting location is in London (a third-party country) = 'keeping distance, leaving room'. Choosing the UK instead of Beijing or Washington indicates that both sides are not yet ready to publicly demonstrate willingness at home. However, being willing to engage in 'dialogue in a third place' is itself a signal of de-escalation.
Second, the three top officials from the U.S. gathered, which has great symbolic significance:
· Secretary of the Treasury Steven Mnuchin: Indicates that the focus is on 'macro-level' issues, such as tariffs and financial openness;
· Secretary of Commerce Wilbur Ross: His absence from the first meeting may mean that the topic of technology controls will be on the agenda this time;
· Trade Representative Robert Lighthizer: Responsible for WTO rules and bilateral agreements, indicating that specific trade structures are also within the scope of negotiations.
This 'combination punch' conveys the message that the U.S. side is creating political space for potential compromises.
Third, the U.S. side should make certain concessions, which are likely to be reflected in next week's talks. The Chinese side being able to take phone calls this week must be a prerequisite for some concessions from Trump (Trump may have made some private commitments); the participation of U.S. Secretary of Commerce Wilbur Ross in this meeting indicates that Trump is willing to reconsider certain technology restrictions on China.
Fourth, some expected outcomes from the market: easing certain technology restrictions, lowering tariffs, and extending the 90-day suspension of tariffs.
Fifth, attention should be paid to whether the outcome of the talks is a 'joint statement' or separate statements from each side; the former is seen as good news. Additionally, keywords like 'positive progress' and 'constructive' will determine the strength of the market's reaction.
However, compared to the first meeting, there is less urgency to reach an agreement this time. The context of the last meeting was that tariffs between both sides had nearly reached a level where business would no longer be viable, and U.S. assets were facing sell-offs; even a slight piece of bad news at that time would trigger a market collapse.
The market will always chase the carrot of trade agreements—if the outcome of next week's talks between China and the U.S. is as expected and moderately positive—even if it's just an announcement to continue communication, suspend certain restrictions, or extend the tariff negotiation window, market sentiment will rise another notch.
