Markets in tailspin amid fears US-China trade deal is in peril

Some analysts are predicting some massive initial market swings. Image Shutterstock

The U.S. and China are moving full speed ahead with their efforts to secure a partial trade deal before tariffs are set to rise on Chinese goods on December 15, according to a report.

Trump's statement on Tuesday prompted investors to reduce their exposure to risk, with Asian shares extending their losses, while the US dollar slid to a one-month low, making gold more attractive.

The House on Tuesday publicly released a new report accusing President Donald Trump of soliciting Ukraine to interfere in the 2020 election.

"I have no deadline, no", the President told reporters in London, where he was due to attend a meeting of North Atlantic Treaty Organisation leaders. "In some ways, I think it is better to wait until after the election if you want to know the truth".

"The China trade deal is dependent on one thing: do I want to make it".

Markets were roiled Tuesday, posting their biggest drop in two months, after Trump said a phase one deal may not happen until after the 2020 election.

Another Chinese government official who declined to be identified said it may take a very long time for Washington and Beijing to reach a deal if they can not find a way to strike a deal while "the iron is hot".

Trump on Monday announced tariffs on US steel and aluminum imports from Brazil and Argentina "effective immediately", opening new fronts in his trade war.

When asked whether the crisis in Hong Kong and the persecution of Muslim minorities in the northwestern Chinese region of Xinjiang will be addressed as part of the trade deal, Pence told Fox Business that United States had spoken out clearly with respect to these two issues.

"That's a trend that is going to continue, especially as long as there's the trade uncertainty", Ross said.

"What President Trump envisions with tariffs is a means to an end, and the end ... is free trade", he said.

On Monday, Trump said he would hit Brazil and Argentina with trade tariffs for "massive devaluation of their currencies".

While the deal being discussed includes new protections for trademarks, copyrights and other intellectual property, trade sources have said it would leave the most hard technology transfer issues to future talks. In a more anticipated move, the U.S. Trade Representative later in the day announced plans for tariffs on US$2.4 billion of imports from France as retaliation for a new tax that hits American tech companies.

With a new round of USA tariffs on Chinese goods scheduled to take effect in less than two weeks, the possibility of another breakdown is growing.

The trade negotiations were further complicated after Trump signed the bill in support of Hong Kong protesters just before Thanksgiving. "I watch jobs. Jobs are what I watch; I watch making the proper deal", he said.

President Trump's comments Tuesday, which downplayed the possibility of a trade deal being reached in the next couple of weeks, were "off the cuff" and should not be taken as a sign that talks are at an impasse, Bloomberg reports, citing people familiar with the matter.



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