As reported by Bloomberg, the Trump-Xi tariff ceasefire that was agreed to last Saturday has left broader markets awaiting further explanations, and less-than-satisfied market participants are seeking more information, and hopes of more than just a temporary hold on trade tensions.
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“Global stocks slumped Tuesday as investors grew skeptical that the U.S. and China made a meaningful breakthrough Saturday. Trump administration officials struggled to explain the deal, while Beijing has yet to confirm the terms.
“The market wants to see more details before it can make up its mind,” said Torsten Slok, chief international economist at Deutsche Bank AG. “It remains unclear for the market whether the trade war will escalate or deescalate from here.”
What exactly will China buy? It’s not clear. In its statement announcing the deal, the White House said China agreed to purchase a “not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product,” and will start buying “agricultural product” from American farmers immediately.
What ‘structural changes’ is China willing to make? The U.S. alleges China forces American companies to cough up sensitive technologies and steals IP in order to modernize its economy. Trump officials are putting pressure on Beijing to tone down its ambitions to lead in emerging industries such as artificial intelligence, a compromise for which Xi has shown no appetite.
U.S. promises are already unraveling. Kudlow said Tuesday that the White House doesn’t have a deal with China to cut car tariffs, backtracking from a tweet by the president two days earlier.
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