President Donald Trump has expressed anxiety about a dismal streak for the stock market over the past several days, telling advisers he is surprised a tentative deal he struck with Chinese President Xi Jinping hasn’t gone over well with Wall Street, according to a person who has spoken with him.
Ahead of Trump’s meeting with Xi, held on Saturday evening in Argentina, some of Trump’s top advisers told him the shaky markets were partly due to unease over a brewing trade war with China. That left Trump hungry to strike some sort of deal with Xi, people familiar with the matter said.
When the two leaders’ agreement was announced on Saturday, Trump felt confident it would help stabilize markets – and it did, for one day.
But the rest of the week has been marked by volatility and steadily lower market closes. Markets fell 559 points Friday amid growing investor anxiety over conflicting signals from top White House advisers about whether Trump still plans to hike tariffs further if negotiations with China go south. The Dow closed down 1,150 points, or 4.5%, for the week.
Contrary to some his advisers, Trump remains confident his combative China policy is not roiling markets; instead, he’s blamed the Federal Reserve. He has told people this week his agreement with Xi will eventually be seen as historic.
But he’s nonetheless revealed some angst over the past days that his China steps did not prove more stabilizing, and expressed concern that extended losses could damage him politically.
The President has stepped in to pump up his deal, opening Friday with a tweet asserting, “China talks are going very well!”
Also Friday morning, Larry Kudlow, director of Trump’s National Economic Council, said in an appearance on CNBC that Trump has indicated he might be willing to extend the current 90-day negotiating window if there’s “good, solid movement and good action.”
But China trade adviser Peter Navarro, the trade hawk of the White House, struck a different tone on CNN. Asked whether the administration would walk away if issues with China are not resolved within 90 days, Navarro suggested Trump would “simply raise” existing tariffs on $200 billion worth of Chinese goods.
“We have a president that’s going to stand up to that for once,” Navarro said.
That triggered the market turn. It was an echo of Tuesday, when Trump himself undercut confidence in his own deal by issuing threats on Twitter.
“President Xi and I want this deal to happen, and it probably will,” Trump wrote on Twitter on Tuesday. “But if not remember, I am a Tariff Man.”
The Dow Jones Industrial Average slumped nearly 800 points Tuesday as investors realized that the agreement between Trump and Xi may not stave off hostilities for long.
A frustrated President asked aides what had happened, and has worked to convey optimism since then.
The White House says the deal with Xi will see China buy large amounts of US agricultural produce to close the trade deficit and includes an agreement by Beijing to curtail the flow of fentanyl, a powerful opioid, into the US.
In return, Trump agreed to hold off on plans to raise all current tariffs to 25% on January 1.
But details about the likelihood of progress and specifics of the agreement have been slim.
News the US requested the arrest of a Huawei executive in Canada on December 1, the day of the Trump-Xi dinner, has only added to concerns a trade war with Beijing will continue.