President Donald Trump announced on Thursday during an event in the Oval Office that he did not plan to meet the Chinese President Xi Jinping before the March 1 deadline set by both parties to agree on a trade deal.
Trump is also uncertain whether there will be a meeting scheduled next month. The remarks of the president confirmed that there will be no meeting between the two leaders before the deadline and it also implies that the hope of a quick trade pact between them is in peril. It is also expected that the situation will negatively affect the U.S. stock market.
The March 1 is the agreed deadline of the truce in the trade war agreed by both sides during a meeting between Trump and Xi in Argentina late last year. The truce aims to give both sides time to reconcile their interests. Trump announced recently that he will increase U.S. tariffs on Chinese imports if the scheduled talks before the date fail. U.S. envoys are scheduled to visit China next week for another round of talks.
Trump claims that he is in a warm relationship with the Chinese president. He tweeted last week that he plans to meet the Xi to hammer out a deal. Trump is scheduled to meet the North Korean leader Kim Jong Un in Vietnam during a denuclearization summit and then he expected that he could schedule his meeting with Xi on the same trip.
Larry Kudlow, White House economic adviser, told reporters that the two leaders could still meet at a later date. The latest news about the trade friction caused a sharp selloff in U.S. stocks. Hopes faded away that the two countries are moving forward to a deal before new tariffs on Chinese imports are added after the truce deadline.
The S&P 500 Index market worth dropped by 0.93 percent, the biggest drop in 2 weeks. U.S. Treasury bond yields also dropped following the move of investors in securing their safety in sovereign U.S. debt.
According to Peter Jankovskis, co-chief investment officer at Oak Brook Investments LLC in Lisle, Illinois, said believes said that the market was affected because the market was lifted in the month of January because of the optimism that surrounds the trade talks. He added that U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin leaves on Monday for the next round of talks in China hoping for more success.
