Trade negotiators are meeting in Beijing this week, and positive comments around those talks have been helping steady markets.
The BofAML economists said in a note. "... the US has tried to minimize the blowback from its tariffs by avoiding consumer products and either avoiding or giving exemptions for products without easy substitutes.
Commerce Secretary Wilbur Ross said Monday that the tariffs are making it difficult for China to stave off social unrest.
"China is employing its full arsenal of stimulus tools — monetary and credit easing, a weaker currency, spending increases and tax cuts," the BofAML economists noted.
Cesar Rojas, Citigroup global economist, said he sees an opportunity for a deal now, in part because of the dynamic of weaker Chinese growth,
Rojas said the U.S. economy is still strong, giving it more leverage against China, where its stimulus has so far failed to stem weakening.
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