This archive report was first published on 4 December 2019.
Trump's Trade Comments Spark Global Market Turmoil ¶
President Trump's comments on trade with China and NATO allies have sent stock markets plummeting, with the S&P 500 index falling 0.7% on Tuesday.
Speaking to reporters in London, Mr. Trump suggested that a trade deal with China might not be finalized until after the 2020 presidential election in November, contradicting earlier statements that a deal was near completion.
He also threatened to impose tariffs as high as 100% on French items, including wines, cheeses, and handbags, and promised to impose tariffs on aluminum and steel from Brazil and Argentina.
The president's comments sparked a sharp decline in global stock markets, with European stocks falling by as much as 1.5% and the S&P 500 index falling 0.7%.
Business groups expressed alarm at Mr. Trump's comments, with the National Retail Federation's senior vice president for government relations saying that the tariffs continue to hurt U.S. businesses, workers, and consumers.
However, some analysts suggested that Mr. Trump's comments may have been a negotiating tactic, and that the president may be trying to use the trade war to his advantage in the 2020 election.
Commerce Secretary Wilbur Ross said that holding off on a deal until after the election would give Mr. Trump more leverage in negotiations, assuming he won.
“Because once the election occurs — and the president seems to be in very good shape for the election — once it occurs and he’s back in, now that’s no longer a distraction that can detract from our negotiating position,” Mr. Ross told CNBC.
Mr. Ross also said that the agreement in principle that Mr. Trump promoted in October was at the “40,000-foot level,” but that coming to terms on details such as what American agriculture products China would buy and how the deal would be enforced had proved to be more challenging.
He said that barring a breakthrough, additional tariffs scheduled to be imposed on Dec. 15 would go into effect.
“We don’t have a breakthrough until it’s in black and white, on paper — signed, sealed and delivered,” he said.
