There was a lot of optimism for some portion of a new trade deal between the United States and China before the end of the year, but U.S. President Donald Trump may have just dumped a bucket of cold water on those hopes, sending the market sinking this morning.
“In some ways, I like the idea of waiting until after the election for the China deal.”
While attending the NATO summit in London on Monday, Trump hinted at waiting until possibly after the November 2020 election before making any sort of agreement with China.
“In some ways, I like the idea of waiting until after the election for the China deal, but they want to make a deal now and we will see whether or not the deal is going to be right,” Trump said.
Asked about his previous goal of reaching an agreement by years’ end, Trump told reporters, ”I have no deadline, no.”
The news rocked markets around the world. Around 9 a.m. EST, France’s CAC 40 was down 1%, while Britain’s FTSE 100 had tanked over 1.7%. Germany’s DAX bucked the trend and was up 0.2%.
U.S. markets continued a downward trend after Monday’s tough close. Right before market open Dow futures plummeted 313 points, or 1.1%, to 27,476, while the S&P 500 dropped 31 points, or 1%, to 3,090. The Nasdaq, which trades heavily in the tech sector, lost 106 points, or 1.3%, to 8,224.
By 9:45 a.m. EST, the Down had shed 318 points.
As traders seemingly hang on every word that Trump says regarding the trade war, one glimmer of hope could come from the fact that the president did not specify if he was talking about a complete trade deal, or the “phase one” part of a greater deal that was initially agreed upon in mid-October.
There has been some optimism that the two countries will put pen to paper on phase one, but Trump has been wary of China’s demands to roll back any tariffs as part of that deal.
And Trump boasted that there is only one thing that a new deal depends on — his own opinion on if the deal is good for the U.S. or not.
“We are doing very well with China right now, and we can do even better with the flick of a pen,” Trump said. He contrasted that with China’s economy, which is “having the worst year by far in 57 years.”
The Associated Press contributed to this report.