Optimism about a rapid resolution of the months-long US-China trade war was undercut by conflicting comments out of Washington and Beijing, sending global stock markets on a downward slide on Friday.
President Donald Trump said he remains optimistic but will not agree to a pact with China unless it is a ‘very good deal.’ And an economic advisor said Trump could walk away from the negotiations.
The economic superpowers have been locked in a trade battle since last summer, striking out with steep tariffs on more than $360 billion in two-way trade, which is beginning to sap economic growth and business confidence.
‘I am confident but... if this isn’t a great deal, I won’t make a deal,’ Trump told reporters as he departed the White House to visit tornado-damaged Alabama.
But he added: ‘We will do very well either way, with or without a deal.’
US and Chinese officials have said they are making progress toward a resolution of the dispute but a US diplomat in Beijing said Friday that an agreement was not imminent.
Washington is demanding deep structural changes, including to how Beijing treats foreign investors and its own state-owned enterprises, and the deal is expected to require commitments on the Chinese currency and protections for American technology.
White House economic advisor Larry Kudlow acknowledged that Trump’s planned meeting at his Florida resort with Chinese president Xi Jinping — which officials said was expected to be held late this month to seal an agreement — could slip into April.
The more cautious tone, coupled with weak Chinese trade data showing plummeting exports and imports, sent global stock markets falling.
And weak US employment data added to the pessimism, causing Wall Street to dive at the open, and although it recovered some ground by the end of session, all three main indices closed lower for the fifth consecutive day.
Kudlow told CNBC that talks have ‘advanced enormously,’ echoing comments from Chinese foreign minister Wang Yi earlier Friday.
But ‘you saw them walk away from North Korea and just saying that... it could apply to trade,’ he said, referring to Trump’s recent summit in Hanoi with the North Korean leader Kim Jong Un, which ended early and without an agreement.
‘I don’t want to hang a timetable on this,’ Kudlow said. US trade representative Robert Lighthizer ‘is doing the best he can.’
‘There may be a meeting in Florida, Mar-a-Lago between the two leaders, maybe late this month or early next month.’
He credited Trump’s tough negotiating strategy and ‘aggressive tariffs’ for bringing Beijing to the negotiating table.
‘We have them over a barrel,’ he said.
Terry Branstad, the US ambassador to China, told The Wall Street Journal in an interview that preparations for a Trump-Xi meeting are not yet under way either.
‘Both sides agree that there has to be significant progress, meaning a feeling that they’re very close, before that happens,’ he said.
‘We’re not there yet.’