Trump Calls Trade Deal ‘Substantial’ — But Here’s What China Is Saying

Following more than a year of tensions between the world’s two largest economies, the United States and China have agreed to a temporary truce to their tariff war — but some investors are still not convinced that a trade deal is in the pipeline.

The stock market seems primed to retreat on Monday after news that China’s President Xi Jinping may not be ready to sign President Donald Trump’s “phase one” pact announced on Friday. According to a Bloomberg report, Chinese negotiators are seeking further talks with American delegates as soon as the end of the month in order to sort through the details.

At market open, the Dow Jones Industrial Average was down 17 points, while the S&P 500 and the Nasdaq Composite also dropped 4 points and 10 points, respectively.

Additionally, on Friday after his scheduled meeting with Chinese Vice Premier Liu He, Trump reportedly announced that the two countries had reached a partial trade agreement, calling it a “substantial deal.” However, Chinese state-owned media warned the U.S. to “avoid backpedaling.”

“While the negotiations do appear to have produced a fundamental understanding on the key issues and the broader benefits of friendly relations, the Champagne should probably be kept on ice, at least until the two presidents put pen to paper,” wrote China Daily. “As based on its past practice, there is always the possibility that Washington may decide to cancel the deal if it thinks that doing so will better serve its interests.”

Among China’s demands, said Bloomberg‘s unnamed sources, were the dismissal of a planned tariff hike in mid-December — a 15% levy on $188 billion worth of Chinese goods including footwear and apparel — as well as the 30% duty on $250 billion imports originally scheduled to take effect tomorrow (Oct. 15). The latter has reportedly been paused, but the White House has yet to confirm the move. (The deal also includes China’s purchase of $40 billion to $50 billion worth of American agricultural products as well as guidelines on intellectual property, according to The New York Times.)

In an interview with CNBC on Monday, Treasury Secretary Steven Mnuchin said, “I have every expectation if there’s not a deal those tariffs would go in place, but I expect we’ll have a deal.”

Shoe industry leaders remained unappeased on the reported agreement, with Footwear Distributors and Retailers of America president and CEO Matt Priest insisting that they will “not be fully satisfied” until Trump removes all import taxes on Chinese products. Similarly, American Apparel and Footwear Association president and CEO Rick Helfenbein said “[it’s] past time that these misguided tariffs were removed.”

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