Trump expects to reach trade deal with China in four weeks

Donald Trump said on Thursday that the US and China could reach an agreement on a trade deal in four weeks' time.

After meeting Chinese vice-premier Liu He on Thursday, the US President said: “This is an epic deal, historic, if it happens. It’s the granddaddy of them all. It has a very good chance of happening. If we have a deal, then we’re going to have a summit,”

He also added that most of the thorniest issues have been resolved this week although talks with Liu are set to continue on Friday.

If the deal is finally reached in four weeks it would set the summit for the two leaders to sign the agreement at the end of this month.

Although both sides are optimistic, analysts still fear the backlash that would come from a collapse in negotiations.

“The greatest threat to the economic outlook remains the trade war between the US and China. While we have seen clear progress in recent months, the last part of the negotiation is expected to be the most difficult and drawn out. Trump remains optimistic about a deal but less confident about the timing,” said Craig Erlam, analyst at Oanda.

Failure to achieve a deal may see the US more than double the 10% tariffs on $200bn (£153bn) of Chinese goods and impose fresh tariffs.

These would be added to the already imposed tariffs on $250bn worth of Chinese goods, and China duties on $110bn of US products.

The damaging trade war has already cast a shadow over global trade and the world economy.