Stocks Tumble as Trump Suggests Delaying a Trade Deal With China Until After Election

WASHINGTON—U.S. stocks dropped sharply on Dec. 3 after President Donald Trump suggested a trade deal with China might have to wait until after the 2020 presidential election.

The Dow Jones Industrial Average sank more than 450 points in morning trading, recording its biggest fall in two months. The S&P 500 and the Nasdaq Composite also lost more than 1 percent.

“I have no deadline, no. In some ways, I think its better to wait until after the election with China,” Trump told reporters in London, where he was due to attend a NATO leaders meeting.

“But they want to make a deal now, and well see whether or not the deals going to be right; its got to be right.”

In October, the worlds two largest economies announced they had reached a partial trade agreement, in principle, on intellectual property, financial services, and agriculture. Both sides have been working to finalize the phase one agreement for signing.

Trump earlier suggested that both leaders could sign the deal in mid-November at the Asia-Pacific leaders summit in Chile, but the summit was canceled by the Chilean government.

Hong Kong Bills

U.S. Commerce Secretary Wilbur Ross on Dec. 3 also commented on the China trade deal that contributed to the sharp drop in stock prices.

Ross told CNBC the United States was set to impose new tariffs on Chinese goods on Dec. 15 unless there was substantive progress in trade talks before then. He also said there were no planned high-level trade talks with Beijing before the Dec. 15 deadline.

“The presidents objective always has been to get the right deal independently of when or anything else like that,” Ross said. “So his objectives havent changed, and if we dont have a deal, hes perfectly happy to continue with the tariffs as he had. So he feels were in a pretty good position one way or the other.”

Ross also noted that the Hong Kong bills have complicated the trade talks.

“I think the new variable is the whole Hong Kong situation. That has complicated life for President Xi,” Ross said.

“They got somewhat upset when the president signed the bill. Well, the reality is that the bill was going to be enacted anyway because they had a veto-proof majority in the Congress.”

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