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Trump Lashes Out at China as Trade Talks Resume; Stocks Fall

President Donald Trump lashed out at China for what he said is its unwillingness to buy American agricultural products and said it continues to “rip off” the U.S., just as the two nations resumed negotiations in Shanghai after a three-month breakup.

“China is doing very badly, worst year in 27—was supposed to start buying our agricultural product now —no signs that they are doing so,” Trump said Tuesday on Twitter. “That is the problem with China, they just don’t come through.”Futures on the S&P 500 stock index, which is hovering near a record high, touched session lows after Trump’s remarks. The price of soybeans and cotton also went lower.

Trump said that the U.S. has “all the cards” and warned that if he’s reelected in 2020 China faces a much tougher deal. He said “they always change the deal in the end to their benefit,” adding that “they should probably wait out our Election to see if we get one of the Democrat stiffs like Sleepy Joe.” That’s a reference to Democratic presidential candidate, former Vice President Joe Biden.

Financial markets are on edge about the fate of talks between the world’s largest economies and a two-day Federal Reserve meeting that starts Tuesday. The U.S. central bank is expected to lower interest rates for the first time in more than a decade, partly because trade war concerns are slowing business investment.

U.S. delegates including Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer arrived in Shanghai to begin another round of talks with their Chinese counterparts. The Americans are set to attend a dinner at the Fairmont Peace Hotel on Tuesday evening, and talks are scheduled to pick up again on Wednesday in China’s bustling port city.

Expectations for a breakthrough in the trade talks remain low. The two sides are further apart than they were three months ago, when negotiations broke down and each side blamed the other for derailing attempts to reach a deal. China is pushing for compromise in the talks, with state media underlining this week that the U.S. should meet it “halfway.”

It’s unclear what triggered Trump’s latest outburst. U.S. soybean exports to China slumped in the first half of the year to the lowest level in more than a decade, while pork sales in June slipped from a month earlier.

After the president’s tweets, soybean futures extended a decline, falling as much as 0.4 percent in Chicago.

(Adds soybean, Trump comments in 3rd and 4th paragraphs.)

Reporting by Terrence Dopp with assistance from Philip Glamann, Emma Dong and Charlie Zhu.