A $ 200 billion trade deal between China and the United States is “completely intact,” President Donald Trump said Monday night, just hours after his senior trade adviser rocked the markets by saying the deal had finished”.
Trump chimed in on Twitter to reassure markets that the deal between the world’s two largest economies, which took nearly two years of disputes, was still at stake.
Earlier Monday when asked about the trade deal, White House trade adviser Peter Navarro told Fox News “it’s over.”
Navarro, an outspoken critic of China and director of trade and manufacturing policy at the White House, said the “tipping point” had been in January, when the United States learned of the coronavirus only “minutes after the wheels worked.” , once a Chinese delegation left Washington, he said, after the signing of the first part of the agreement.
The adviser’s comments injected a strong dose of volatility into world markets as the currency and futures markets fell and Asia Pacific stocks fell into negative territory, before recovering after Navarro issued a statement that his comments ” they had been taken out of context. “
And that the trade agreement “continues in place”, receding in its previous comments.
“They had nothing to do with the Phase I trade agreement, which is still in effect. He was simply talking about the lack of confidence we now have in the Chinese Communist Party, after they lied about the origins of the China virus and insisted on a pandemic in the world, “he said.
In response to conflicting messages emanating from the White House, Chinese Foreign Ministry spokesman Zhao Lijian said Navarro “had no credibility.”
“The American politician he mentioned is speaking completely meaningless and ridiculous,” Zhao said when asked about Navarro during a press conference on Tuesday.
“China’s position on economic and trade issues between China and the United States is consistent and clear,” he added, without further comment.
Chinese stocks ended higher on Tuesday as investors calmed down by President Trump’s clarification that the trade deal is still in effect.
Navarro wrote books titled “The Coming China Wars” and “Death by China: Confronting the Dragon” before joining the Trump White House.
He is among senior Trump officials who have angered China by referring to the disease as the “China virus” and has pointed the finger at Beijing over the spread of the respiratory illness, first detected in the Chinese city of Wuhan. in 2019.
The trade pact between the United States and China was well received by economists earlier this year, after nearly two years of tariffs and tensions between the countries. The economic downturn weighed on financial markets and raised tariffs on $ 370 billion of Chinese goods, hurting global growth.
In January, USA. USA And China signed an interim ‘Phase 1’ trade deal that culminated the bitter 18-month battle, with China vowing to boost purchases of US goods by $ 200 billion over two years, and was hailed for an economic deal with a victory – creator Trump.
But the disruptions caused by the coronavirus pandemic caused US goods exports to China to drop in the first quarter, and in May Trump said he was “very torn” about whether to end the Phase 1 deal.
In addition to trade tensions, the shock of the coronavirus pandemic has led to a worsening of relations between the two powers, with increasingly harsh rhetoric from Washington and Beijing inflaming tensions, which some analysts have considered a new Cold War.
Navarro said on Twitter earlier this month that President Trump had built the “most beautiful economy in history, but the China virus left 30 million Americans unemployed.” Adding that Trump will “rebuild again.”
However, US economists warn that the country cannot afford to boycott Beijing.
American soybean producers, in particular, rely heavily on China’s purchasing power and hope that the trade deal can survive the ongoing war of words.
According to a book published Tuesday by former national security adviser John Bolton, Trump specifically asked Chinese leader Xi Jinping to agree to buy more soy and wheat from the US. In a bid to support his November election and win favor with voters in the rural Midwest.
NBC News was unable to verify the claims in Bolton’s book.
Reuters contributed to this report.
Kristen Welker, Martha C. White and Leou Chen contributed