Trump: US-China talks ongoing, but deal is not done

United States President Donald Trump said on Friday that he was not ready to make a trade deal with China.

Trump also said he decided that the US would not do business with Chinese telecom giant Huawei Technologies for the time being, prompting US stocks to fall in the morning before bouncing back around midday.

Speaking to reporters at the White House, Trump also called into question whether another round of scheduled talks would actually take place in early September. He plans to impose 10 percent tariffs on the remaining $300bn worth of Chinese imports around that time.

“We’re doing very well with China. We’re talking with China,” Trump said before departing for fundraisers on Long Island, New York. “We’re not ready to make a deal – but we’ll see what happens.”

Trump’s comments fanned renewed fears on Wall Street that the world’s two largest economies were digging in for a longer and costlier trade war.

“China wants to do something, but I’m not ready to do anything yet,” the president added. “Twenty-five years of abuse – I’m not ready so fast, so we’ll see how that works out.”

‘Sharp swings’

Markets looked set to end a punishing, deep-in-the-red week that started with a surprise drop in China’s yuan currency to below seven to the dollar, prompting the US Treasury to label Beijing a currency manipulator.

“Until we get some sort of tangible answers to what the [Trump] administration is going to do with China, this is going to be an overhang on the market, creating plenty of sharp swings,” said Andre Bakhos, managing director at New Vines Capital LLC.

Trump stood by his administration’s currency accusation, saying that the fact that China was subsequently able to stem the yuan’s slide was proof of manipulation – which itself could offset US tariffs on Chinese imports by blunting their impact on American consumers.

Trump’s comments also dashed hopes that the US Department of Commerce would soon approve some licenses for American companies to resume some sales to Huawei. The department in May had put the telecom equipment maker on a national security blacklist, effectively banning sales of US technology, software and services to the firm.

“We are not going to do business with Huawei,” Trump said. “I really made the decision it’s much simpler not to do any business with Huawei.”

In late June, Trump had agreed with Chinese President Xi Jinping that the US would ease some restrictions on Huawei in exchange for increased Chinese purchases of American agricultural commodities while the two countries resumed negotiations to resolve a year-long tariff war.

But a two-day meeting in Shanghai at the end of July failed to yield any significant purchases by China – nor progress on US demands for changes to intellectual property, technology transfer and subsidy policies – prompting Trump to announce his next round of tariffs.