As the trade war looks as though it can end imminently, the debate over sentiment versus substance is still raging.
Stocks surged Thursday, Jan. 17 after the Wall Street Journal reported that the U.S. is considering lifting tariffs levied against China in order to hasten a deal that would end a trade war between the world's two largest economies.
U.S. Treasury Secretary Steve Mnuchin is pushing for the duties to be lifted, but he is facing resistance from U.S. Trade Representative Robert Lighthizer, sources told the Journal Thursday.
The Treasury later denied this report, but the sentiment had already taken hold in the markets.
"There is pressure on the U.S. and Chinese governments to find a solution," Wilmington Trust CIO Tony Roth told TheStreet on Wednesday. "That doesn't mean it has to be an overly substantive solution, but it needs to allow both sides to say they've reached a deal and walk away from the deal.
He indicated that even a non-substantive deal would suffice for investor sentiment in the shorter term. That view was certainly vindicated by the afternoon trading reaction.
That isn't enough for Daniel McGahn, CEO of American Superconductor (AMSC) , a company that recently won an intellectual property dispute with Chinese wind energy provider Sinovel Wind Group.
"We had pretty large cases over in China," he explained. "We're probably unique in that we've actually won an IP case with China."
McGahn explained that a substantive solution is paramount moving forward.
"I think it's clear that the climate has to change," he said. "There has to be repercussions for actions...there really needs to be better safeguards and protection to keep the IP sacrosanct."
To hear McGahn's full comments on the issue, check out the interview above. For Wilmington Trust's CIO, Tony Roth's, comments on the longer term issue of IP theft, check out his full interview here.