US President Donald Trump has accused China of “totally violating” a trade agreement between the two nations, sparking a sharp reaction in the markets. In a post on his Truth Social platform, Trump expressed his frustration, stating, “China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY!”.
This development comes just two weeks after breakthrough negotiations in Geneva, where the US and China agreed to scale back tit-for-tat tariffs for 90 days. The temporary truce was expected to stabilize the global economy, but Trump’s accusations have reignited concerns about the future of US-China trade relations.
US Treasury Secretary Scott Bessent had previously indicated that trade talks between the two nations were “a bit stalled” and would likely require direct involvement from Trump and Chinese President Xi Jinping to reach a deal. “I think that given the magnitude of the talks, given the complexity, that this is going to require [the leaders of both countries] to weigh in with each other,” Bessent told Fox News.
Despite the setback, Bessent remains optimistic about the prospects of future talks. He expects more discussions between the US and China in the coming weeks and potentially even a call between Trump and Xi Jinping. “I believe that we will be having more talks with [China] in the next few weeks and I believe we may at some point have a call between the president and [Xi Jinping],” he said.
The US-China trade war has been ongoing, with both nations imposing significant tariffs on each other’s goods. Trump’s tariffs on Chinese goods were primarily aimed at addressing longstanding US complaints about China’s state-dominated, export-driven economic model. However, the recent agreement did not address these underlying issues, leaving them for future talks.
Market Reaction
The news of Trump’s accusations sent shockwaves through the markets, with US stock index futures dropping sharply. According to Reuters, at 8:16 am ET, Dow E-minis were down 153 points, or 0.36%, S&P 500 E-minis were down 26.5 points, or 0.45%, and Nasdaq 100 E-minis were down 102.75 points, or 0.48% ยน.
Tariffs and Trade
The US-China trade war has significant implications for the global economy. Tariffs are customs duties levied on certain merchandise imports or categories of products, designed to help local producers and manufacturers be more competitive. However, economists are divided on the effectiveness of tariffs, with some arguing they can drive prices higher and lead to damaging trade wars.
What’s Next?
The future of US-China trade relations remains uncertain, with Trump’s accusations casting a shadow over the recent agreement. As the situation unfolds, one thing is clear: the stakes are high, and the outcome will have far-reaching implications for the global economy.
Key Players
Donald Trump: US President who accused China of violating the trade agreement
Xi Jinping: Chinese President who has a “very good relationship” with Trump, according to US Treasury Secretary Scott Bessent
Scott Bessent: US Treasury Secretary who has been brokering trade talks between the US and China.
Source: Africa Publicity
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