China and the U.S. are reportedly close to a new trade deal, though there is still considerable concern that China will walk back some of its reported concessions.
The news sent markets whipsawing throughout the day, sharply down at first before an afternoon rally.
Some U.S. officials fear that China is reneging on certain trade concessions, Bloomberg News reported first Tuesday afternoon. People familiar with the talks told Bloomberg that they are concerned China’s pushback and stalling discussions could threaten President Donald Trump’s chance at a boost ahead of his 2020 reelection bid.
Two others said that Beijing negotiators have shifted their stance because they haven’t received convincing assurances from Washington that U.S. tariffs imposed on Chinese exports would be lifted.
The report knocked stocks to their lows of the day and nearly sent the Dow Jones Industrial Average into negative territory on the session. The Bloomberg report did note that some U.S. officials believe China’s moves were normal.
Equities quickly rebounded, however, after Dow Jones reported that trade talks are in the final stages. It also reported that U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will fly to Beijing the week of March 25 and China’s Vice Premier Liu will travel to Washington the week after.
Trump and Chinese President Xi Jinping had been expected to hold a summit at the president’s Mar-a-Lago property in Florida later this month. Last month, the administration delayed an additional round of tariffs on Chinese goods. Secretary of State Mike Pompeo said earlier this month the U.S. and China were “on the cusp” of a possible deal.