Stocks plunge amid confusion over U.S.-China trade truce

Ivan Schwartz
December 6, 2018

But the Chinese commerce ministry said negotiators will "actively push forward negotiations within 90 days in accordance with a clear timetable and roadmap" - marking Beijing's first public acknowledgement of the deadline announced by the U.S. at the weekend. The plunge came hours before the Chinese Commerce Ministry said that it was confident it can reach a trade deal with the U.S as the countries continue to dispute tariffs placed on one another's goods.

On Wednesday, Trump tweeted that "very strong signals" were being sent by China regarding trade with the United States.

As part of the truce, Trump agreed to hold off on plans to raise the tariffs on $200 billion in Chinese imports to 25 percent beginning January 1, leaving them at the current 10 percent rate.

The Dow Jones Industrial Average fell by about 799 points or 3.09 percent on Tuesday after Trump reminded China that he was "a Tariff Man" who could easily hike tariffs on Chinese goods if they failed to deliver on their promise to purchase American goods.

The US President sowed more confusion as he opened the door to lengthier negotiations with China, suggesting that they could extend beyond a 90-day deadline to reach an agreement to avoid a massive tariff increase. It was the first official confirmation from China that there's a 90-day window for the talks.

"President Xi and I want this deal to happen, and it probably will". We are right now taking in $billions in Tariffs. Chinese officials, meanwhile, did not confirm any of these details.

The disarray surrounding the China deal coincides with a global economy that faces other challenges: Britain is struggling to negotiate its exit from the European Union. China's crude oil imports from the USA had ground to a halt.

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'When it comes to the trade policies that have been proposed so far specifically, I think we can all expect that there will be further tariff increases on USA imports of Chinese goods, whether that's within the 90-day window that we are now operating under a pause or outside that window, ' Anderson told a small group of reporters in Beijing on Thursday.

Talks during the 90 day period during which President Donald Trump has agreed to suspend US tariff hikes will start by focusing on farm goods, energy and automobiles, said a Ministry of Commerce spokesman, Gao Feng.

Pompeo said in Brussels on Tuesday the United States could abandon some global agreements to thwart bad actors like China, which he accused of cynically exploiting World Trade Organization rules. Instead, the two sides are to negotiate over US complaints about China's trade practices, notably that it has used predatory tactics to try to achieve supremacy in technology. Trump says he wants to de-escalate trade tensions with China but insists on Beijing addressing long-standing issues such as intellectual property theft, forced technology transfers, and tariffs and nontariff barriers.

White House trade adviser Peter Navarro told Fox News: "We have 90 days to see progress on that and I think it is premature for people to lose faith in that process". In a series of tweets on Tuesday morning, he pushed the Chinese to buy American agricultural products "immediately", and questioned whether a "real deal" with Beijing is actually possible.

The US President said China was supposed to begin buying US agricultural products and others "immediately" as part of an agreement to reduce the trade imbalance between them.

Also, China's commerce ministry made no mention of the auto tariff cuts which Mr Trump said earlier this week China had agreed to.

But Chinese officials haven't confirmed any of their goals in the unwritten agreement, saying only that teams from both sides would follow through with more negotiations.

Other reports by GizPress

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