01:11 - Source: CNN Business
Dow dives as enthusiasm for Trump's trade truce fades
Washington CNN —  

President Donald Trump, who declared over the weekend that he’d struck “an incredible deal” on trade with China, instead said Tuesday that the Americans and the Chinese remain where they were before he met with Xi Jinping in Argentina: at the start of negotiations.

“Let the negotiations begin!” Trump tweeted early Tuesday, suggesting in a separate post that he’s open to extending the 90-day deadline he imposed – but also that he’d be happy to move ahead with a dramatic increase in trade duties in Chinese imports.

I am a Tariff Man,” he tweeted.

The comments punctured the investor optimism that followed the positive announcements after Trump’s two-and-a-half-hour steak dinner with the Chinese President, sending markets sliding more than 800 points.

The turmoil represented another stumble for Trump, who has struggled to close deals on the world stage. He is attempting to pull off a deal with Beijing just as he begins selling a recalcitrant Congress on a renegotiated trade agreement with Canada and Mexico – and pressuring European carmakers to increase US production, or risk new auto tariffs.

After markets closed on Tuesday, Trump said it was “either now or into the future” that the US would be strike a deal with Beijing. “China does not want Tariffs! We are either going to have a REAL DEAL with China, or no deal at all,” he said in two tweets.

One of Trump’s deputies also attempted to do damage control over the White House’s messaging on the presidential meeting.

“All this hand-wringing that’s going on in the media, I think, maybe that’s the fault of us not communicating more precisely about what occurred – maybe that’s why I’m here,” said Peter Navarro, the White House trade adviser, on Fox News. “I was there and it went on for hours and you had the President of China … going through over 140 items of what they would do and promises made.”

From the start, it wasn’t totally clear what the Chinese had truly committed to. The statements issued by Washington and Beijing revealed stark differences and few strong commitments – a far cry from any firm deal.

In a bid to show a good faith effort, China’s Commerce Ministry reaffirmed its commitment to “implementing already-agreed-on specific points as quickly as possible” in a statement provided Wednesday. It was also the first time the Chinese government acknowledged the 90-day timetable announced by the White House earlier.

White House officials spent Monday clarifying a range of issues, including when the 90-day countdown clock would start – confusion that culminated with the press office sending out a transcript revising a statement by National Economic Council Director Larry Kudlow to reporters that the clock would start January 1 to indicate it would instead begin December 1, the date of the dinner.

That continued Tuesday, when Treasury Secretary Steven Mnuchin downplayed concerns by investors over trade talks, while noting volatility in equity markets would have no impact on negotiations.

“The market is now in a wait-and-see,” Mnuchin said, speaking at the Wall Street Journal CEO Council annual conference in Washington. “The market is trying to figure out is there going to be a real deal at the end of the 90 days or not.”

Trump has said Beijing committed to increasing purchases of agricultural products – a signal to soybean farmers whose exports to China have been hit by the trade dispute – as well as energy products.

Farmers, I LOVE YOU!” Trump tweeted on Monday. “Farmers will be a very BIG and FAST beneficiary of our deal with China. They intend to start purchasing agricultural product immediately.”

The White House has sought to portray the agreement with China as significant, pointing to never before seen participation by Xi. Trump went so far as to describe the dinner as “extraordinary” and a “BIG leap forward,” in a tweet Monday.

Officials have celebrated the Argentina dinner as a meeting between equals, with Kudlow saying Trump “made the pitch himself.”

“You could even say he was selling this, which was, in my opinion, quite unusual for a head of state,” Kudlow said. “Guys like me are supposed to know the details. He did.”

But the prelude to the meeting inverted the usual progression of trade negotiations, with a Chinese delegation canceling a planned trip to Washington in the days leading up to the dinner and few if any specifics worked out among lower-level staffers ahead of time.

That showed in the subsequent uncertainty over what, if anything, had really been accomplished.

Beijing has yet to confirm any specifics on a verbal agreement discussed between the leaders of the world’s two largest economies.

“We don’t know yet, but I am hopeful,” said Kudlow, speaking Tuesday at the same Wall Street Journal conference where Mnuchin appeared.

China sent at least one reassuring signal on Tuesday with dozens of Chinese government agencies agreeing to sign an agreement to implement tougher sanctions for intellectual property theft.

Mnuchin tried to assure investors that both presidents – Trump and Xi – had agreed on “very, very specific issues” that touched on top US concerns related to intellectual property, forced technology, joint ventures and cyber issues. He made comments on trade talks minutes after stocks began falling sharply, erasing Monday’s gains.

The secretary stressed China made pledges well beyond Xi’s willingness to take a second look at a $44 billion deal for Qualcomm Inc. to purchase NXP Semiconductors NV and roughly $1.2 trillion in commitments to purchase US agricultural, energy and other goods from the United States. “That was not the case at all,” said Mnuchin.

“This was the first time that China responded to us on the structural side with very specific items,” he said. The Treasury secretary said the Chinese government responded to a 30-page document sent by the Trump administration by providing a 142-item list with specific responses ahead of the dinner. There, Xi spoke for 45 minutes walking Trump through a “very specific plan,” Mnuchin recounted.

Still, the Treasury secretary cautioned that “time will tell” whether the two countries would be able to reach a deal ahead of a 90-day deadline.

“Whether we can get to that – a real agreement, where at least we make a lot of progress over the 90-day period or not, time will tell,” said Mnuchin, adding any decision to go beyond that timeframe would be “up to the President to decide.”

But Trump’s own tweets drew direct responses Tuesday, including from Democratic Senator Tim Kaine of Virginia. The 2016 Democratic vice-presidential nominee responded to Trump by tweeting: “Tariff Man”?? Reminds me more of The Beatles’ ‘Nowhere Man.’: He’s as blind as he can be // Just sees what he wants to see.”