War of Words Emerges as the Two Presidents Meet at G-20

As the two presidents of the United States and China prepare for their one on one talks at the G-20 meeting later on Saturday in Osaka Japan, it seems both sides have begun to posture their negotiations with a war of words emerging from both camps.

Prior to Saturday’s meeting between the leaders of the two superpowers both President Trump and Chinese President Xi have begun a war of words with recent statements conveying a willingness and desire to resolve the current issues, with caveats on both sides indicating necessary components needed to bring the two countries closer to a resolution.

Just prior to this historic meeting President Trump said on Wednesday that he was prepared to impose additional tariffs on China if talks this week do not end in progress, but suggested additional duties could start at a lower amount of 10%.

As reported by Politico, “In an interview with Maria Bartiromo on Fox Business News on Wednesday morning, the president said he might begin with a 10 per cent duty, if his meeting with Chinese President Xi Jinping at the G20 summit does not end well.”

At the same time Chinese President Xi Jinping stated that there could be no resolution to the trade war without the U.S. lifting its ban on Huawei as part of the trade truce.

According to the Wall Street Journal “Chinese President Xi Jinping plans to present President Trump with a set of terms the U.S. should meet before Beijing is ready to settle a market-rattling trade confrontation, raising questions of whether the two leaders will agree to relaunch talks.

Among the preconditions for a trade agreement, Chinese officials with knowledge of the plan said, Beijing is insisting that the U.S. remove its ban on the sale of U.S. technology to Chinese telecommunications giant Huawei Technologies Co. Beijing also wants the U.S. to lift all punitive tariffs and drop efforts to get China to buy even more U.S. exports than Beijing said it would when the two leaders last met in December.”

What is at stake is the strength or weakness of the global economy with analysts at CNBC stating that the outcome could be a watershed moment that could impact the course of markets and the global economy for the second half of the year. With one analyst economist saying that if talks fail and the trade war escalates, the world is at risk of a recession.

In an article penned by CNBC’s Patti Domm she said, “The meeting, at the G-20 summit, is so important that market pros broadly see it as an event that could affect the course of markets for the rest of the year; impact the trajectory of global economic growth, and help determine when and what actions the Federal Reserve and other central banks might take.”

As far as gold prices are concerned the outcome of this weekend’s meetings will greatly influence the direction that gold trades in next week. As of 4:47 PM EDT gold futures are currently trading $3.90 lower, with August futures fixed at $1411.50.

Wishing you as always, good trading,