Over the past 12 hours, the U.S.-China trade has gone from being “over” to “intact,” but the back and forth contributed to added uncertainty and fluctuating stock futures.
In a Fox News interview Monday, White House trade advisor Peter Navarro, said in response to whether the U.S.-China trade deal was over, “It’s over.”
The “turning point,” he added, came as the U.S. discovered what would become the COVID-19 pandemic only after the Chinese delegation left upon signing the trade deal. “Everybody…around this country now understands that China lied and Americans died,” Navarro said.
His comments on the trade deal sent Dow futures down roughly 400 points, but as of Tuesday morning they were more than 200 points up and seem to be headed higher.
Dialing back his words, Navarro said in statement released late Monday, “My comments have been taken wildly out of context. They had nothing at all to do with the Phase I trade deal, which continues in place. I was simply speaking to the lack of trust we now have of the Chinese Communist Party after they lied about the origins of the China virus and foisted a pandemic upon the world.”
Hoping to further quell concerns over the Phase One trade deal, President Trump also tweeted late Monday night, “The China Trade Deal is fully intact. Hopefully they will continue to live up to the terms of the Agreement!”
In May, negotiators from the U.S. and China agreed on a call to press forward with the initial trade deal, committing to “enhance macroeconomic and public health cooperation,” even though the pandemic has reportedly stalled China’s progress on its promises to purchase up to $75 billion worth of U.S.-manufactured goods and raise its spend on U.S. agriculture, which is supposed to reach between $200 billion and $500 billion by 2021.
The U.S. has continued to blame China for its role in the pandemic, and Trump has already alluded to tariffs as recompense. The ongoing threats of adverse actions from both sides has cast a pall of fragility over the trade agreement and relations between the two nations.