Asia-Pacific shares went down on Friday, a day after U.S. President Donald Trump said China wasn't delivering on its pledge to purchase more agricultural products as part of the terms in the highly-anticipated China-U.S. trade deal.
According to Reuters, ANZ analysts noted that Trump's comments about China's alleged failure to live up to its commitments on trade with the U.S. may not be a huge move compared to previous statements but the U.S. president may be delivering a warning.
.MIAPJOOOPUS saw a dip of 0.5 percent, Japan's Nikkei stocks, .N225 dropped by 0.11 percent, and Australian stocks saw a more significant dip of 0.16 percent. Analysts believe the downtrend was caused by concerns regarding the potential re-escalation of the China-U.S. trade war.
It didn't help that U.S. Federal Reserve Chairman Jerome Powell hinted on Thursday about a potential rate cut. Powell said the cut was likely at the Fed's upcoming meeting. He explained that the cut is more likely now due to weakening investment inflows as brought about by trade dispute with other countries.
The easing of Asian stocks on Friday contradicted Thursday's share trends when international indexes climbed. The Dow Jones Industrial Average, in particular, hit a record high as it soared 0.85 percent.
Trump did not specifically say he will re-escalate the trade war. However, it appeared as if he was taunting this possibility as he tweeted on Thursday that he is hoping for Beijing to "start soon" in purchasing American agriculture products.
It is unclear if Trump's statements are legitimate at this point since the Chinese government previously denied White House claims that it reneged on commitments that were part of the trade talks.
May was the month of trade wars as hopes for a China-U.S. trade deal fell apart. However, the G20 Summit in Osaka paved the way for negotiations to come around once more. Trump said he will ease up the ban on Huawei and talks between Beijing and Washington will resume.
At that time, Trump said the U.S. agreed to hold off the third round of tariffs on billions of Chinese goods while China committed to purchasing more farm products. According to CNBC, White House top economic advisor Larry Kudlow said it was "very, very important" that the agreement is carried out.
Farmers are part of Trump's campaign as he seeks another term of presidency. He pledged to help farmers largely impacted by the China-U.S. trade war and those whose crops were destroyed due to flooding.
Beijing has yet to release an official statement regarding the U.S. president's latest accusations.