Trump: China deal can come after election
President’s remark rocks markets; Dow drops 280 points
LONDON — President Donald Trump on Tuesday downplayed the likelihood of reaching a U.S.-China trade deal before next year’s elections — and then shrugged off the tailspin that his remarks caused in the stock market.
Speaking in London, where he is attending a NATO summit, Trump said he had “no deadline” to end the 16-month trade war between the world’s two largest economies, which has caused economic damage for both sides.
“In some ways I like the idea of waiting until after the election,“Trump added.
The president has previously suggested that China wanted to wait until after the election to negotiate a deal.
Stocks began sinking right after Trump’s latest rhetoric shot at the Chinese leadership. His brash remarks could amount to either a short-term negotiating gambit or a sign of his willingness to run for reelection without a breakthrough in the trade war.
Tensions between the two nations flared anew last week after Trump signed legislation expressing U.S. support for pro-democracy demonstrators in Hong Kong.
“We’re running out of time, and the markets are finally woken up to ‘Hey, there’s a risk out there and maybe things aren’t going to be all good after all,’ ” said Randy Frederick, vice president of trading & derivatives at Charles Schwab.
The Dow Jones Industrial Average lost 280.23 points, or 1%, to 27,502.81. The index was briefly down 457 points. The S&P 500 index fell 20.67 points, or 0.7%, to 3,093.20. The Nasdaq dropped 47.34 points, or 0.6%, to 8,520.64. The Russell 2000 index of smaller company stocks gave up 4.95 points, or 0.3%, to 1,602.63.
Technology stocks led the losses Tuesday.
The sector is highly sensitive to twists in the trade dispute because many of the companies rely on
China for sales and supply chains. Apple slumped 1.8% and Intel fell 2.8%.
Stocks have been racking up losses this week, giving up some of the market’s solid gains from a strong November rally fueled partly by investor optimism about the prospects for a trade deal between Washington and Beijing.
On Dec. 15, additional U.S. tariffs are set to kick in on many Chinese-made items, including smartphones and toys. The
Trump administration is already taxing more than $360 billion worth of Chinese imports. China has counterpunched by taxing $120 billion in U.S. imports.
Pressure is building on both sides to complete what Trump has called a limited “Phase 1” deal before the deadline. Still, Trump could end up postponing the tariffs, as he did in October, to allow more time for negotiations.
“We’re less than two weeks away from new tariffs that will be implemented on a bunch of consumer goods that have never had tariffs on them, and I think that’s when the consumer really starts to feel the pain,” Frederick said.
Wall Street is also weighing the potential for an expanded series of trade disputes. On Tuesday, Trump proposed tariffs on $2.4 billion in French products in retaliation for a tax on global tech giants including Google, Amazon and Facebook. That follows a threat Monday to raise tariffs on steel and aluminum from Argentina and Brazil.
The lack of a trade deal before the year ends could mean the market is in for a turnaround from a strong, record-setting November.
Two days of deflated hopes has already sent the S&P 500 about 1.5% lower and the tech-heavy Nasdaq has slipped 1.7%.
December is a typically solid month for the stock market, with the S&P 500 making gains regularly since the last recession ended in 2009. Last year, though, fears about a recession and rising interest rates hurt the major indexes.
Later Trump dismissed the tumult on Wall Street, choosing instead to highlight howmuchstock prices have risen since the start of the year.