6 Stocks To Gain From A US-China Trade Deal

Fresh optimism over a possible solution to the U.S.-China trade deadlock buoyed markets on Dec 12. A series of developments were the primary catalysts to this new-found optimism. Firstly, President Trump indicated on Dec 11 that he will step in to resolve the crisis over a top Huawei executive if it helps to ease trade relations with China. 

Additionally, The Wall Street Journal reported on Dec 12 that China is working toward offering foreign companies greater access to its domestic market. Previously, China had reportedly offered to make key concessions in order to resolve the lingering trade conflict during a conversation with top U.S. officials.

These developments indicate that a U.S.-China trade deal is increasingly likely over the next few months. Technology, materials and industrial stocks are likely to benefit the most from such an agreement. Picking stocks from these sectors would be prudent at this point.

Trump Ready to Intervene in Huawei Executive Crisis

Speaking to Reuters on Tuesday, President Trump said that he was willing to intervene in the crisis created by the arrest of a top Huawei executive if it helped to improve trade relations with China. Trump said that he would step in if he thought “it’s good for what will be certainly the largest trade deal ever made.”

Trump also sounded confident about arriving at a trade deal with China. He said that telephonic discussions were being held with China on trade issues. This was possibly a reference to the teleconference held on Dec 11 between the top U.S. and Chinese officials. According to Trump, additional meetings between U.S. and Chinese officials are likely to take place in the near future.

China May Offer Greater Access to Foreign Companies

According to The Wall Street Journal, China is looking to replace its Made in China 2025 plan with a policy which offers foreign companies greater access to its domestic market. President Xi’s ambitious Made in China 2025 plan aimed at making China a leader in cutting edge technologies. Robotics, information and clean-energy cars were some of the focus areas of this blueprint.

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