Wall Street Loses Big As Trump Overstates Gains from China Trade Talks
China continued to remain silent amid mounting reports the bloodbath on Wall Street yesterday was caused in part by U.S. president Donald Trump's patently false claims to have wrung significant concessions from president Xi Jinping.
Analysts agree a series of demoralizing tweets by Trump indicating no significant progress had been made in ending his trade war against China helped ignite the massive Wall Street sell-offs yesterday. American media reports the Dow Jones Industrial Average fell by 200 points after those tweets.
One particularly damning tweet by Trump boasted, "I am a Tariff Man."
At the end of the day, the Dow plummeted 799 points or 3.1%. At one point, the Dow was down 818 points. The S&P 500 lost 3.2%, while the NASDAQ shed 3.8%. It was the Dow's fourth-biggest point decline in history.
Trump further fanned investor fears by saying he would "happily" sign a fair deal with China but also admitted to the possibility the talks will ultimately fail.
He said "Xi and I want this deal to happen, and it probably will. But if not remember... I am a Tariff Man."
China isn't confirming or denying any of Trump's statements, however. Oddly, Chinese state-controlled media state made no mention of Trump's 90-day deadline or China's slashing tariffs on U.S. cars by 40 percent. China also made no mention of buying specific American-made products.
Uncertainty as to what Trump and Xi really agreed upon indicated to investors that no one seems to know exactly what's going on, and this temporary trade war truce is no guarantee of any substantive progress in the future being made.
Trump's series of tweets also show he has no problems with re-igniting the trade war if a broader agreement on his terms isn't reached in the next 90 days.
It also didn't help investors that Trump's boasts turned out to only boast devoid of any reality. Trump claimed China had agreed to slash its current 40 percent tariffs on U.S. auto imports to zero. He also claimed China will "start purchasing the agricultural product immediately."
On the other hand, National Economic Council Director Larry Kudlow refused to confirm any of these boasts. Worse, the White House refused to support Trump's claims.
Kudlow acknowledged there was no "specific agreement" on auto tariffs. He also said he couldn't "specifically" answer questions about China's agricultural product purchases. He said his "expectation" is that China might roll back tariffs on goods "quickly."
Kudlow and Trump also disagreed on when this 90-day trade war truce will begin. Kudlow said it starts Jan. 1, 2019; Trump demurred, saying the clock started ticking on Dec. 1.