"Next week is a very big week, and Lighthizer is clearly a hawk," said Tom Block, Washington strategist at Fundstrat. He said it was important to get a positive tone after the meeting because none of the other sessions was a downbeat. "They gave a good police officer, a bad police team went there, it will be very important how this communique comes out after the meeting."
Economists believe the US and China will eventually come together as the trade wars hurt both countries
November's trade data showed that the US trade deficit was sharply reduced. Both imports and exports declined, but the decline in imports was greater.
"This meant a sharp drop in imports of 3.6 percent from the previous month, which is a big decline." We also received trade data for Asian exports to the US in December. Asian exports to the US declined in December 1
Block said there is a fog of trade problems at the moment and although he expects a deal, the outcome with China is still uncertain. He also points out that the revised trade agreement with Canada and Mexico is still pending, as both Republicans and Democrats seek to change Congress.
"There are bilateral negotiations with Japan … There are negotiations with the EU There are many moving pieces in the trade, and [Trump] set a lot of important points with its bustle, and I do not think anybody knows Where do you go picture, "said Block.
Strategists expect that if the Department of Commerce makes use of car fares, the administration would wait until it has reached an agreement with China.
"We believe China has shown some willingness to make concessions," said Ciitigroup economist Cesar Rojas. "For example, to protect intellectual property, the government has pledged stronger protection in another forum … There is also some news that suggests that they will enforce legislation on theft of core technologies."
Rojas said that this is the crucial point to be in detail and whether China obeys enforcement and whether the US can be satisfied with the enforcement.
"If there is a positive tone, then our expectation is that there might be a deadline to acknowledge the progress of the negotiations and therefore the sales representative would move forward If the tone is not positive, this indicates a potential escalation but we are still several weeks ahead of this deadline, "said Rojas.
If the Commerce Department suggests this would impose tariffs on European cars, it would not be surprising given Trump's criticism of German luxury vehicles in the US, even though BMW and Daimler are also US manufacturers.
"We expect the report will recommend riffs," said Rojas. "The government is likely to push for trade talks … What we see is signs of a slowdown in the European economy … If this threat of additional tariffs is threatened when they were relatively weak, the US will receive additional leverage."