President Donald Trump denied that he is under a deadline to reach a preliminary trade deal with China but acknowledged that negotiations are at an important stage as both countries face another round of tariff escalation scheduled to take place on Dec. 15.
“We’re at a critical stage. They’ve called us today and they’ve called us yesterday. We’re having ongoing discussions,” Trump said alongside Canadian Prime Minister Justin Trudeau in London, where both are attending a NATO meeting. “We’ll see what happens, but if the stock market goes up or down, I don’t watch the stock market. I watch jobs.”
The statement is a departure from remarks only a day before when he claimed that the stock market was up as much as 21 percent because he announced he would hit Brazil and Argentina with steel and aluminum tariffs after accusing the countries of devaluing their currencies. The Office of the U.S. Trade Representative also ratcheted up trade tensions with Europe on Monday after threatening fresh tariffs in response to France’s move to tax U.S. digital giants like Google and Facebook.
The Dow Jones Industrial Average is down more than 360 points midday after Trump said he liked the idea of waiting until after the 2020 election to strike a deal with China.
Stocks could drop even further if Trump goes through with plans to hit almost all remaining imports from China, roughly $160 billion worth of goods, risking a repeat of last December’s market plummet.
The next batch of tariffs could take an even larger bite out of consumer confidence as the items targeted will be primarily consumer goods like laptops and smartphones.
Still, Trump’s deputies this week supported his leverage tactics, including waiting out a deal until after the election and downplayed how much another round of tariffs would hurt markets.
Commerce Secretary Wilbur Ross said the duties would be imposed “unless there’s some real reason to postpone them,” he said Tuesday on CNBC.
“If there were a little more time needed for talks, he probably would postpone it. If enough substantive progress had been made, he might,” Ross added.
The injection of new uncertainty over the timing of a deal comes a week after Trump and his senior advisers gave out positive signals that an agreement would be clinched soon. Trump said the two sides were in the “final throes” of negotiations and a senior administration official told POLITICO that only “millimeters” separated the two sides.
Trump’s latest threat to drag out a possible deal until after the 2020 election is likely an effort to get China to commit to the final issues on the table, said one person close to the talks.
“The window for the Chinese to act is now, but it’s unclear if they will,” the person said. “They have misread Trump on so many occasions and they may misread him yet again.”
The two sides have been trying to hammer out the details of an agreement in principle that was reached in October. Trump said China agreed to purchase between $40 billion and $50 billion worth of U.S. farm goods within two years of a deal and put in place financial service market openings and intellectual property protections. In exchange for concessions, Beijing has demanded that the U.S. not only end the Dec. 15 tariff threat but also roll back earlier duties.
Trade talks have been complicated over how China’s agricultural purchase commitments will be enforced and the pace and scale at which the U.S. will roll back tariffs, multiple people close to the talks have said.
Trump wants an iron-clad commitment by China to the agricultural purchases with no conditions. He is also seeking a credible way to enforce that obligation but Beijing has been pushing for flexibility and wants any purchase agreement to be bound by market demand, said the person close to the talks.
The president has touted that a so-called phase one deal would resolve 60 percent of the outstanding issues. But the person said the commitments China is making address only between 5 percent and 10 percent of the problems that plague the commercial relationship between the two countries.
Trump maintained that he will hold out for a good deal with China.
“They want to make a deal, but I like the deal that we have,” Trump said on Tuesday. “The deal that we have could get even better and I could do it all by myself.”