In December, Beijing's commerce ministry said China and the USA "made new progress" on the issues of trade balance and intellectual property, one of the main sticking points of the trade dispute, during a phone call between officials from the two countries. -China relations will force other USA companies to cut their sales estimates in China.
White House economics adviser Kevin Hassett was in a chipper mood on Thursday as he predicted many companies will announce lower than expected earnings as a result of the trade war with China.
Despite the December truce, "most firms expect trade war to escalate", the report said.
"That puts a lot of pressure on China to make a deal", he said.
Gerrish is close to Robert Lighthizer, the United States trade representative, and the official most in favour of using the trade war to punish China. Beijing responded by imposing penalties on $110 billion of American goods, slowing down customs clearance for USA companies and suspending issuance of licenses in finance and other industries. "There are a heck of a lot of USA companies that have sales in China that are going to be watching their earnings being downgraded next year until we get a deal with China". The ministry said that it would host the United States team on January 7-8 for high-level talks, during which representatives of both parties will discuss "implementing the important consensus" mapped out by Trump and Xi.
But aside from products facing earlier tariffs - including washing machines, solar panels and metals - Chinese exports to the U.S. have held up better than expected.
Since then, the case for peace has strengthened as economic risks in the USA and China have grown and financial markets have reeled. The Dow was off 5.6 percent for the year, with the broader Standard & Poor's index of 500 stocks down 6.2 percent.
The U.S. Federal Reserve's interest rate increases have caused investors to move in and out of various markets, hitting some emerging markets hard. In December, factory activity shrank for the first time in more than two years.
Beijing last month said that negotiations would start by focusing on agricultural goods, energy and automobiles.
"Clearly both sides are feeling economic stress, but both have high ambitions".
White House Council of Economic Advisers chairman Kevin Hassett said in an interview with CNN's Poppy Harlow on Thursday that "a heck of a lot" of USA companies will have the same problem unless a deal is struck to lift tariffs imposed by both sides a year ago. "However, these reasons can only take you so far..."