Chinese officials meeting to negotiate a new trade deal in Washington had a sudden change of plans and cut their visit short, cancelling a trip to meet U.S. farmers in Montana and sending stock markets sharply downward Friday afternoon.
The trade officials reportedly changed their travel schedule and will return to China earlier than expected, according to Montana Farm Bureau Federal Director of National Affairs Nicole Rolf, per CNBC. Rolf said they did not receive an explanation as to why the trip was cut short.
Just yesterday Sonny Perdue, the U.S. Secretary of Agriculture, confirmed the meetings were a go and were a way for China to build goodwill with U.S. farmers.
So much for that.
The Chinese delegation reportedly had visits set up for Bozeman, Montana, and Omaha, Nebraska, and the cancellation puts doubt over whether China will start purchasing American agricultural products again, which it stopped doing in April after U.S. President Donald Trump slapped tariffs on a number of Chinese imports.
China accounted for $5.9 billion worth of American farm exports in 2018 and is the world’s top buyer of soybeans, buying about 60% of what the U.S. exported last year.
The surprise cancellation is a bit of a shock after the U.S. and China had agreed to somewhat of a ceasefire in the trade war. Just this week Trump granted tariff waivers on a number of Chinese imports including plastic straws, dog leashes and more. China also agreed to exempt U.S. agricultural products like soybeans and pork from tariffs. Trump also delayed imposing tariffs on $250 billion worth of Chinese imports from Oct. 1 to Oct. 15 as a “gesture of good will.”
The news sent markets sharply downward, erasing all of the day’s gains and then some. The Dow Jones Industrial fell more than 100 points from session highs while the S&P 500 fell 0.4% and the Nasdaq dropped 0.8%.
“It’s good that we’re challenging the records, but I don’t know if we have enough momentum to stay around these levels,” TD Ameritrade chief market strategist J.J. Kinahan told CNBC. “I think 2,800 to 3,000 is the range we’ll stay in” without a trade deal.