Hopes rise for US-China trade deal after Mueller report

Chinese President Xi Jinping and U.S. President Donald Trump attend a welcome ceremony at the Great Hall of the People in Beijing on Nov. 9, 2017.

With President Donald Trump in a stronger position now that the Mueller investigation is out of the way, China has more incentive reach a deal on U.S. trade, analysts say.

Over the weekend, U.S. Attorney General William Barr said a nearly two-year investigation by special counsel Robert Mueller did not find enough evidence to make a case against Trump in obstructing justice, or running a campaign that coordinated with Russia’s efforts to influence the 2016 election.

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The Mueller report isn’t a game changer, but it should encourage China to keep up recent momentum in trying to finalize a deal with Trump,China will still have redlines, and a deal is by no means guaranteed, but the fact that an impeachment looks less likely will be meaningful for Beijing’s calculus,One question now is whether Trump himself decides that he now has more leverage over Beijing and drives a harder line in negotiations

Michael Hirson, Asia director at consulting firm Eurasia Group, said in an email to CNBC.

U.S. stock index futures initially rose after the news, which investors expect removes a distraction for an administration that can now focus on striking a deal with the world’s second largest economy. But Asian shares fell Monday, and U.S. futures followed suit, amid overarching concerns over slowing global growth. If the world’s two largest economies can agree on a trade deal, then that could help boost confidence in the economic outlook.

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