China vowed Wednesday to move swiftly to strike a trade consensus with the United States, even as mixed signals on the detente from self-described “Tariff Man” Donald Trump’s administration upset global markets.
Trump sowed more confusion as he opened the door to lengthier negotiations with China, suggesting that they could extend beyond a 90-day deadline to reach a deal to avoid a massive tariff increase.
But the Chinese commerce ministry said negotiators will “actively push forward negotiations within 90 days in accordance with a clear timetable and roadmap” — marking Beijing’s first public acknowledgement of the deadline announced by the US at the weekend.
The ministry lauded Trump’s talks with President Xi Jinping at the weekend as “successful” and said it was “confident” that their agreement will be implemented.
The ministry vowed to start implementing “specific matters” that were agreed — saying “the sooner the better” — but it did not provide any details.
Trump and Xi agreed on a trade war truce on the sidelines of a G20 summit in Argentina on Saturday, holding off on new tariffs and giving negotiators three months to reach an agreement.
China pledged to buy more from the United States and the White House said the two sides would negotiate “structural changes” to intellectual property protection, but few details and no dollar amounts were disclosed.
Adding to the confusion, the US leader indicated on Tuesday that the talks could go beyond the March 1 deadline.
“The negotiations with China have already started. Unless extended, they will end 90 days from the date of our wonderful and very warm dinner with President Xi in Argentina,” Trump tweeted.
But the US leader kept up the threats as he warned that he was ready to make China “pay for the privilege” of selling in the US market if the negotiations fail.
While he said he would “happily sign” a fair deal that addresses US concerns, he warned: “remember, I am a Tariff Man.”
The change in tone and the increased confusion over what was achieved at the meeting contributed to a sharp decline in the US stock market, which plunged on Tuesday, driven lower by trade worries and fears for future US economic growth. Chinese shares also opened lower on Wednesday.
As part of the truce, Trump agreed to hold off on plans to raise the tariffs on $200 billion in Chinese imports to 25 percent beginning January 1, leaving them at the current 10 percent rate.
The tone of Trump’s latest tweets show an apparent shift from 24 hours earlier, when he was unreservedly triumphant, saying relations with China had taken a “BIG leap forward.”
On Tuesday, he said US Trade Representative Robert Lighthizer would lead the talks to see “whether or not a REAL deal with China is actually possible.”
US Treasury Secretary Steven Mnuchin said markets were in a “wait-and-see” mode.
“The market is trying to figure out, is there going to be a real deal at the end of 90 days or not,” Mnuchin said at a Wall Street Journal event on Tuesday.
Beijing pledged to import more US products to narrow its massive trade surplus with the United States following the Argentina talks, but it has given few details about what was agreed.
The White House has said China agreed to purchase a “very substantial” amount of agricultural, energy, industrial and other products from the US to reduce a yawning trade gap. It also will begin buying products from US farmers “immediately”.
The two sides will also negotiate “structural changes” on the forced technology transfer, intellectual property protection, cyber intrusions and cyber theft, services and agriculture, according to the White House.
IP theft is a core battleground in the trade war. China’s state planner announced Tuesday stiffer punishments for serious violators of IP rights, a move that may help ease Washington’s discontent.
Trump also said China would roll back tariffs of 40 percent on cars, though Beijing has yet to confirm the move.
Analysts at Schwab said in a commentary the market was concerned that “uncertainty appears to be resurfacing on whether a permanent deal can be reached.”