Trump not yet decided

The WSJ reports that trade negotiators are laying the groundwork for a delay on the December 15 tariffs, citing officials on both sides.

In recent days, officials in both Beijing and Washington have signaled that Sunday is not the final date for reaching a so-called phase-one deal ... Chinese and U.S. officials involved in the talks say they don't have a hard deadline

This report immediately turned US stock futures and USD/JPY but there are some dark clouds included in the report as well. They note that lead negotiators haven't spoken for 10 days and that the President is undecided.

President Trump, however, hasn't yet made his decision, and he has overridden his advisers on trade several times to add tariffs.

Some reports are spinning this as a sign that a delay is planned but it says that negotiators are laying the groundwork and planning for it; but no decisions have yet been made.

In the bigger picture, in order to get a phase one deal, the US is demanding that China guarantees its pledge to buy more soybeans and other agricultural products, something China is balking at because it may violate global trade rules.

A delay at this point is widely expected but the risks remain of a blowup. At the same time, the nature of the delay is also key. If it's open-ended along with a warning that tariffs could be imposed at any minute, then that hardly removes any economic uncertainty. A harder deadline 3 or 6 months out would create some breathing room, but also some future anxiety.

Here is the WSJ report.

A separate report from Bloomberg says Beijing sees a delay of the Dec 15 tariffs along with both sides reducing existing tariffs.

It's this second report that's potentially more consequential but the language in it is confusing.

Chinese officials expect the U.S. will delay a threatened tariff increase set for Sunday as both sides focus on de-escalating tensions by cutting import taxes currently in place rather than removing specific products from the target list, according to people familiar with the matter.

A delay in Dec 15 tariffs is widely expected but both sides reducing existing tariffs would be a concrete sign of progress and goodwill.