Asian equities drop broadly today as the US-China trade talks look set to conclude without substantial progress. US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer didn’t comment on the discussions as the final day of close-door session starts today. But it’s reported that both sides are still far apart on the core issues, which would need a meeting between Trump and Xi to make the agreement.

Subsidies on State-Owned Enterprises that create unfair competition is one of the deadlocks as it’s considered fundamental policy of the Chinese government that couldn’t be touched. Reuters reported that China has pledged to adjust the industrial subsidy program to comply with WTO rules. But without any details, the US side, rightfully, is skeptical on enforcement of Chinese government’s promises.

White House economic adviser Larry Kudlow fold fox news that “the vibe in Beijing is good.” And, “negotiators in Beijing “are soldiering on”. Kudlow also said meeting with Chinese President Xi on Friday is “a very good sign” and the US delegation is “getting the job done”. Kudlow was “cautiously optimistic” on the outcome. Meanwhile, there is no decision on the trade truce by 60-days yet. But as we argued before, extending the period while keeping the current tariffs is just prolonging the damage to the economies.

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