The top US and Chinese trade officials held the Phase-1 trade deal review talks on Tuesday, albeit with a delay of about 10 days.
Officials reaffirmed their commitment to the Phase-1 deal, despite the failure of China to fulfill its obligations to purchase more American goods under the agreement signed earlier this year due to the plague of Covid19 and the global economic collapse it caused.
US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin had their first official dialogue since early May with their counterpart on commercial matters, Chinese Vice Premier Minister Liu He via a phone call.
Concerns that the agreement might be shaky due to the constant confrontation between the US and China on multiple different fronts have not been resolved despite positive statements.
“Both sides see progress and are committed to taking the steps necessary to ensure the success of the agreement,” the US Trade Representative’s office (USTR) said in a statement after what it described as a regularly scheduled call.
Lighthizer, Mnuchin, and Liu discussed the steps China is taking to make the structural changes desired in the deal, the USTR also said without providing further details.
President Donald Trump, who frequently expresses his anger at China due to the coronavirus epidemic told reporters last week that he postponed the talks with China saying “I don’t want to deal with them now”.
“China and the US agreed to create the conditions and environment to continue advancing the phase 1 trade agreement implementation,” the Chinese side said.
The German statistics office, Destatis, announced on Tuesday that the decline of the German economy in the second quarter was not as sharp as expected, but was the largest drop in output since the start of gross domestic product calculations in 1970.
According to Destatis, gross domestic product, the largest measure of goods and services produced in an economy, shrank by 9.7% compared to the previous quarter, due to the coronavirus pandemic and socio-economic lockdown measures. This was below estimates of a 10.1% decrease.
Destatis said that in Europe’s engine power economy, GDP fell 11.3% on a calendar and price-adjusted basis in the second quarter. This figure was also below estimates of a contraction of 11.7%.
Household final consumption in Germany decreased sharply by 10.9% and fixed capital formation in machinery and equipment decreased by 19.6%. Capital formation in the construction sector decreased by 4.2% in the second quarter, mainly due to the extremely strong first quarter.
The Munich-based Ifo Institute for Economic Research announced on Tuesday that German business sentiment rose in August, exceeding forecasts, and continued to rise for the fourth month in a row.
Determining that the German economy is on the way to recovery, the institute’s business environment index rose from 90.4 points in July to 92.6 points in August. Economists surveyed by the American newspaper The Wall Street Journal were forecasting a median estimate of 92.0.
The companies’ assessment of their current situation increased from 84.5 points in July to 87.9 points in August. However, although business expectations climbed from 96.7 points in July to 97.5 points, it remained below the forecast of 98.0.
The Ifo index is based on a survey of approximately 9,000 companies in the manufacturing, service, trade, and construction sectors.
In the manufacturing sector, the business climate indicator rose once again, making a significant jump from minus 12.1 in July to minus 5.4 in August, as companies’ assessment of their current status was more optimistic. In the service sector, the index jumped from 2.1 points in July to 7.8 points.
Ifo said the upward trend in trade has visibly flattened. The trade index rose only slightly from minus 5.1 points in July to minus 4.8 points.