Slim chance of comprehensive U.S.-China trade deal this week: Nomura

FILE PHOTO: Chinese and U.S. flags are set up for a meeting during a visit by U.S. Secretary of Transportation Elaine Chao at China's Ministry of Transport in Beijing, China April 27, 2018. Picture taken April 27, 2018. REUTERS/Jason Lee/File Photo

LONDON (Reuters) - Nomura analysts see a high likelihood further negotiations between the United States and China will be needed before a final trade deal is reached, dragging out a dispute between the world’s two biggest economies that has kept investors on edge.

“At this point, we think that both the Trump administration and the Chinese government will have a hard timing backing down from the negotiating positions they have laid out in the last few days,” analysts at the Japanese bank said.

Nomura sees a 10 percent possibility of the U.S. and China coming to an agreement on a comprehensive trade deal this week, and a five percent chance that negotiations “completely break down”.

The bank said there is a 45 percent chance new tariffs on China imports threatened by U.S. President Donald Trump go into effect on Friday but negotiations continue thereafter, and a 40 percent chance the U.S. postpones the tariffs and talks continue.

Reporting by Thyagaraju Adinarayan, Editing by Helen Reid