Trump's next round of tariffs on Chinese goods is four days away and reports are beginning to emerge that Chinese and American officials have effectively abandoned that deadline and are plotting moves beyond it.
Analysts who spoke to CNBC say they expect Trump's tariffs will be delayed at literally the 11th hour on Saturday night and the DBS financial services group, which operates out of Hong Kong, has informed their clients that the deadline will pass without a deal because Trump still hasn't agreed to roll back his tariffs.
Analysts from DBS said in a note on Wednesday that negotiators from both countries “have moved away from a deadline for a Phase 1 trade deal.”
“US remains unwilling to meet China’s term to roll back existing tariffs in exchange for its purchases of US agricultural products. The final decision to delay tariffs rests with US President Donald Trump,” they wrote.
Meanwhile, delaying both trade talks and tariffs would keep the Chinese yuan stable — at between 7 and 7.10 against the dollar, DBS said. The yuan first sank past 7 to the dollar in more than a decade in August amid an escalation in the trade war.
The South China Morning Post also reported this morning both sides are trying to reach a consensus by Saturday night, but it currently appears unlikely.
The caveat to these reports that tariffs will be delayed is that the decision ultimately rests with Trump himself so, even if officials from both sides privately say the tariffs will be delayed, we won't know for sure until Trump acts and I don't expect he'll act until Friday or Saturday.
I personally expect the tariffs will be delayed and Trump will claim they've reached a tentative deal, but the latter won't actually be true.
Recall that Trump claimed he had secured his "greatest and biggest deal ever" all the way back in October and it was not true then and it probably won't be true if he makes the same claim tomorrow. But even if past is obviously prologue, that won't necessarily stop markets from rallying based on nothing.