China has said that Beijing and Washington will push forward with trade negotiations in the next 90 days and it is confident that an agreement can be reached but doubts remain over whether the two sides can resolve their deep differences.
The commerce ministry, in a brief statement on its website, also said China would work to implement specific issues already agreed upon as quickly as possible.
The ministry’s statement came after the US president, Donald Trump, called himself “a Tariff Man” on Twitter and warned more levies could be imposed on China. The slew of Trump tweets prompted markets to fall as investors lost faith in a detente between the two nations.
The Dow Jones industrial average lost close to 800 points – just over 3%. Other market indexes also fell sharply: the S&P 500 lost 3.2% and the Nasdaq dropped 3.7%.
US stock markets slide after Trump warns China: ‘I am a Tariff Man’
Markets in the Asia-Pacific followed suit on Wednesday with Tokyo and Seoul both down 0.8%, and Australia’s benchmark ASX200 index falling 1.35%.
Trump and the Chinese president, Xi Jinping, had reached a temporary truce in their trade war at a meeting over dinner at the G20 in Argentina on Saturday.
The threat of further escalation in the trade war between the world’s two largest economies has loomed large over financial markets and the global economy for much of the year, and investors initially greeted the ceasefire with relief.
But the mood has quickly soured on scepticism that the two sides will be able to reach a substantive deal on a host of highly divisive issues within the 90-day negotiating period that was agreed. Failure would raise the spectre of fresh US tariff action and potential Chinese retaliation as early as March.
The commerce ministry said China-US trade and economic discussions were “very successful”. The statement did not mention Trump or Xi, however the state news agency Xinhua later said the ministry statement was hailing their meeting.
“We are confident in implementation … The economic and trade teams from both sides will actively promote the work of negotiations within 90 days in accordance with a clear timetable and road map,” it said.
“The Chinese side will start with implementing specifics on which there is already consensus, the faster the better.”
Trump, via Twitter, threatened to place “major tariffs” on Chinese goods imported into the United States if his administration is unable to reach an effective trade deal with Beijing.
China has said comparatively little about the Trump-Xi agreement after senior Chinese officials briefed the media following the leaders’ meeting, and there have been some differences between US and Chinese accounts of what the deal entails.
A Chinese official told Reuters officials were “waiting for the leaders to return” before publicising details. Xi and his most senior officials, including the commerce minister and the country’s two top diplomats, are in Portugal, and due back in China on Thursday.
Financial markets tumbled as a result of the uncertainty.
The selling “has all the nasty hallmarks that traders typically call the perfect storm,” said Stephen Innes, head of Asia-Pacific trade at OANDA. He said investors “are probably left feeling duped, tricked and maybe even snookered by some ill-advised backslapping comments post G20”.
“While trade war is certainly the number one driver of global risk sentiment, the current meltdown is morphing into a Hydra with familiar points of irritation – trade, (Federal Reserve), Brexit, Italy, global growth – coming to a head,” he added.
Reuters contributed to this report
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