Last week we joked that after the cancellation of this month’s Asia-Pacific Economic Cooperation summit in Chile due to unrest in the country, Trump should host the APEC meeting at his infamous Doral resort in Florida.
Trump should offer to host APEC at the Doral resort— zerohedge (@zerohedge) October 30, 2019
And while that - for now at least -remains an absurd stretch, on Sunday President Trump told reporters at the White House that a trade agreement with China would be signed somewhere in the U.S. "First of all I want to get the deal,” he said after returning for a trip to New York City. "The meeting place, to me, is going to be very easy."
Trump previously hinted of a US signing venue when on Saturday he said that the "Phase One" of the trade deal could be signed in Iowa.
Of course, the trade deal first has to be completed, but who cares about nuance these days...
However providing the weekly dose of trade deal optimism ahead of tonight's first futures print, earlier on Sunday Commerce Secretary Wilbur Ross expressed optimism - what else - that the U.S. would reach a “Phase One” trade deal with China this month and said licenses would be coming “very shortly” for American companies to sell components to Huawei.
Ross also said that Iowa, Alaska, Hawaii (however, not Florida), as well as locations in China were all possible places for Trump and Xi Jinping to sign the deal now that the choice of the Chile venue is no longer practical. Even so, Ross called the agreement “particularly complicated” and said the U.S. was “making sure that each side has a very correct and clear, detailed understanding of what each side has agreed to."
“We’re in good shape, we’re making good progress, and there’s no natural reason why it couldn’t be,” Ross told Bloomberg Television in an interview on Sunday in Bangkok, when asked if the deal is on track to be signed this month. “But whether it will slip a little bit, who knows. It’s always possible.”
The Trump administration has long ago learned that all it takes to goose markets higher is slip a little hopium that the trade deal, which was "just around the corner" over a year ago, is still "just around the corner." Indeed, stocks hit a new all time high on Friday amid what Bloomberg called "signs of a breakthrough on trade" when top negotiators both spoke on the phone Friday and described the talks as “constructive” as they look to lower tensions in a trade war that has roiled global growth.
Yet even with the deal supposedly imminent, Ross refused to commit whether the Trump administration would suspend the December tariff hike, according to Bloomberg. He also said further phases of the deal would depend on things involving legislation on the part of China and an enforcement mechanism, without which "all you’ve got is a pile of paper."
Meanwhile, in what appeared a rather "clear" mixed message, last week Bloomberg reported that Chinese officials cast doubts about reaching a comprehensive long-term trade deal due their concerns that Trump will respect a formal deal, Bloomberg reported last week. China has stated for months that a final deal must include the removal of all punitive tariffs, and has balked at reforms in areas such as state-run enterprises that could jeopardize Xi Jinping's grip on power.
As a reminder, several weeks back, Trump placed dozens of Chinese firms on the Commerce Department’s “entity list,” hindering their ability to purchase American software and components. It first targeted Huawei in May for national security reasons, and last month added 28 more companies including artificial intelligence giants SenseTime Group Ltd., Megvii Technology Ltd. and Hangzhou Hikvision Digital Technology Co.
Entities on the list are prohibited from doing business with American companies without being granted a U.S. government license, although some have maintained relationships with banned companies through international subsidiaries. China’s government has signaled it will hit back over the blacklist, and the companies have denied wrongdoing.
The blacklist is also hurting American companies that do business with China, and particularly Huawei. Trump said in June after meeting with Xi in Japan that he’d “easily” agreed to allow American firms to continue certain exports to Huawei, and weeks later Trump said he’d accelerate the approval process for licenses.
Still, none have been granted so far. The president as recently as this month green-lit the approval of licenses in a meeting with advisers, according to people familiar with the matter, but an announcement has yet to be made.
On Sunday, Ross said the licenses “will be forthcoming very shortly,” noting that the government received 260 requests.
“That’s a lot of applications -- it’s frankly more than we would’ve thought,” Ross said in the interview. “Remember too with entity lists there’s a presumption of denial. So the safe thing for these companies would be to assume denial, even though we will obviously approve quite a few of them.”