U.S. shares falter, investors await U.S.-China trade deal

U.S. shares falter, investors await U.S.-China trade deal

U.S. shares falter, investors await U.S.-China trade deal

Stocks are opening broadly higher on Wall Street following reports that the US and China are getting closer to a deal on trade.

As part of the ongoing talks, the US asked the Chinese not to retaliate or bring World Trade Organization cases in response to USA tariffs that could be imposed to enforce the deal, according to a person familiar with the negotiations.

The S&P 500 index fell 26 points, or 0.9 percent, to 2,777. U.S. President Donald Trump takes part in a welcoming ceremony with China's President Xi Jinping on November 9, 2017 in Beijing, China.

The American newspaper said talks last month in Washington had helped narrow differences, meaning a formal deal might be ready for signing when President Donald Trump and Xi Jinping meet in late March while the Chinese president is visiting Europe. The National People's Congress, China's rubber stamp parliament, begins its annual session on Tuesday.

Beijing has offered to lower tariffs and other restrictions on American cars, farm equipment, chemicals and other products in exchange for Washington removing most of the sanctions imposed against Chinese products since a year ago.

However, the USA wants the ability to re-impose levies on Chinese goods if talks fail on enforcement mechanisms on intellectual property theft and related matters. China is also willing to buy $18 billion worth natural gas from Houston-based Cheniere Energy Inc.

As part of a deal, China is pledging to speed up the timetable for removing foreign-ownership limitations on car ventures and to reduce tariffs on imported vehicles to below the current auto tariff of 15%.

A senior administration official cautioned on Sunday that a decision had not yet been made over lifting the U.S tariffs.

"Markets expect a deal by the end of March, but the key here will be whether the deal results in the removal of all tariffs", said Tom Essaye, founder of The Sevens Report. China's restrictions on data will also go untouched in the deal.

"I'm never afraid to walk from a deal, and I would do that with China , too, if it didn't work out", the president said.

The U.S. dollar was boosted by the trade reports and held earlier gains against a basket of currencies after the weak construction data.

The two nations have imposed tit-for-tat tariffs on billions of dollars worth of each others' goods, roiling financial markets, disrupting manufacturing supply chains and shrinking US farm exports.

Trump and members of his economic team have has sounded optimistic about the chances for sealing a deal. It's still unclear how Beijing would follow through on those purchases if retaliatory tariffs remained in place and other trading barriers aren't removed, the person added. These include efforts by the Chinese to curb cybertheft and subsidies the Trump administration argues make it harder for USA companies to do business in China.

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