President Donald Trump on Wednesday scrambled to reverse a stock market plunge over fears his China trade deal won’t happen, arguing Beijing was sending ‘very strong signals’ and that he believed President Xi Jingping’s promises.
The market is closed Wednesday as the United States celebrates a National Day of Mourning for the late President George H.W. Bush, whose funeral will held at the Washington National Cathedral.
That gives the president 24 hours to repair the damage inflected when the market plunged almost 800 points on Tuesday after a series of tweets from Trump suggested a trade war with China could resume next year.
President Donald Trump scrambled to reverse a stock market plunge over fears his China trade deal won’t happen
Trump took to twitter to signal is faith that a trade deal with China will be signed
The president was back on Twitter early Wednesday morning with a new series of tweets – this time promoting his faith in his Chinese deal, which he made after a two and a half hour dinner with Xi on the sidelines of the G20 summit in Argentina.
‘Very strong signals being sent by China once they returned home from their long trip, including stops, from Argentina. Not to sound naive or anything, but I believe President Xi meant every word of what he said at our long and hopefully historic meeting. ALL subjects discussed!,’ he wrote on Wednesday morning.
The Dow dropped 799 points, or 3.1 percent, amid fears of an economic down turn that could come out of a failed deal to end the trade war with China.
‘People are still very concerned about the trade war,’ Dan Suzuki, portfolio strategist at Richard Bernstein Advisors told CNN. ‘Financial markets are increasingly showing signs of fear of a recession.’
Trump didn’t help when he tweeted ‘I am a tariff man,’ which investors saw a sign a deal may not happen.
‘We are either going to have a REAL DEAL with China, or no deal at all – at which point we will be charging major Tariffs against Chinese product being shipped into the United States,’ he wrote Tuesday in a tweet that sent stocks tumbling.
Washington and Beijing agreed to a 90 day cease fire in their meeting in Argentina, as the two sides try to work out an escalating trade war.
The president issued a new series on Wednesday touting the China deal
Plunge: The Dow Jones moved into free fall on Tuesday after Trump’s intervention on trade and closed down almost 800 points
Trump has agreed to delay a rise in tariffs on China while talks continue.
But details of what exactly the two sides have agreed to have been vague and White House aides have struggled to explain what the two countries actually agreed on.
And China has not confirmed that it made most of the concessions that the Trump administration has claimed.
Trump on Wednesday touted Beijing’s agreement to designate Fentanyl as a Controlled Substance. Fentanyl, mixed in with heroin, has caused a spike in drug overdoses in the U.S.
‘One of the very exciting things to come out of my meeting with President Xi of China is his promise to me to criminalize the sale of deadly Fentanyl coming into the United States. It will now be considered a ‘controlled substance.’ This could be a game changer on what is…….
…..considered to be the worst and most dangerous, addictive and deadly substance of them all. Last year over 77,000 people died from Fentanyl. If China cracks down on this ‘horror drug,’ using the Death Penalty for distributors and pushers, the results will be incredible!,’ Trump wrote in a pair of tweets.
Trump sent markets plunging Tuesday when a series of tweets caused investors to doubt the deal
Trump had met with Chinese President Xi Jinping in Argentina on the sidelines of the G20
Trump touted China’s agreement on fentanyl, which has caused a spike in U.S. drug deaths
The president’s top trade adviser said Tuesday evening that ‘hand-wringing’ in the media wasn’t necessary even as he admitted that the administration had sowed confusion.
‘Maybe that’s the fault of us not communicating,’ Peter Navarro told Fox News in an appearance on Special Report. ‘Maybe that’s why I’m here.’
Among the conflicting assertions that White House officials made was over whether China had actually agreed to drop its 40% tariffs on U.S. autos.
In addition, Treasury Secretary Steven Mnuchin said Tuesday on the Fox Business Network that China agreed to buy $1.2 trillion of U.S. products. But he added, ‘if that’s real’ – raising some doubt – it would close the U.S. trade deficit with China, and ‘we have to have a negotiated agreement and have this on paper.’
Many economists have expressed skepticism that very much could be achieved to bridge the vast disagreements between the two countries in just 90 days.
‘The actual amount of concrete progress made at this meeting appears to have been quite limited,’ Alec Phillips and other economists at Goldman Sachs wrote in a research note.
The 90-day timetable started Saturday and will stave off a round of tariffs on Beijing that were scheduled to go into effect on Jan. 1, the White House said on Monday.
It’s by March 1 that the White House has set as the deadline for the Chinese to act.
Trump’s tweets on Tuesday sent the market plunging
Earlier this year Trump imposed an import tax of 25 percent on $50 billion in Chinese products, then hit an additional $200 billion worth of goods with 10 percent tariffs.
Those 10 percent tariffs were scheduled to ratchet up to 25 percent on Jan. 1 if the U.S. and China failed to reach an agreement to at least postpone that move.
In Buenos Aires, Trump agreed to delay the scheduled U.S. tariff increase for 90 days while the two sides negotiate over the administration’s complaints related to how Beijing systematically steals trade secrets and forces the U.S. and other foreign countries to hand over sensitive technology as the price of admission to the vast Chinese market.
In return, China agreed to buy what the White House called a ‘not yet agreed upon, but very substantial’ amount of U.S. products to help narrow America’s gaping trade deficit with China.