Dow Jones Industrial Average (DJIA) futures plunged 129 points in early trading Wednesday, pointing to a weak stock market open. Investors remain nervous as White House economic advisor Larry Kudlow painted a bleak picture of trade deal progress with China.
Speaking to CNBC, Kudlow confirmed that Trump won’t agree to roll back tariffs until a full deal is agreed in principle.
You’re not going to have one side or the other agree to any tariff adjustments until the entire deal is put together. Let me make that as clear as possible. The president has said, again, since there’s no formal agreement, we can’t say whether there’ll be any tariff adjustments at all.
Dow futures contracts took a heavy beating in premarket trading Wednesday after finishing yesterday’s session exactly flat. US stock market futures plunged overnight with DJIA futures falling 130 points as of 5.10 am ET.
Kudlow’s comments came hours after Trump threatened to increase tariffs on China in a speech at the New York Economics Club. The president maintained that China and the US were “close to a deal” and that it could happen “soon.” But the statement was laced with a new threat:
If we don’t make a deal we’re going to substantially raise those tariffs.
Trump also pointed the finger at China for the breakdown in negotiations, claiming a full deal was agreed over seven months ago.
“I had a deal. We had a deal. We were so close to a deal. The hard points were negotiated. Opening up China, intellectual property, all sorts of tremendous penalties. And then one day we get a call, seven months ago, they’d like to see us. And they explained why they can’t do three or four things that we agreed to.”
Investors are struggling to reconcile the conflicting reports out of China and the US. Last week China claimed the two sides had reached an agreement to rollback tariffs in phases.
They’d like to have a rollback… not a complete rollback because they know I won’t do it.
The US president and Xi Jinping were expected to sign the phase one agreement this weekend at APEC summit in Chile. The meeting has since been cancelled. Despite Trump’s claims that a deal is “close,” the two sides seem further away than ever.
Last modified: June 14, 2020 9:52 AM UTC