President Donald Trump said he called off last weekend’s trade talks with China, raising questions about the future of a deal that is now the most stable point in an increasingly tense relationship. “I canceled talks with China,” Trump said Tuesday in Yuma, Arizona. “I don’t want to talk to China right now.” The phase-one trade deal, which came into force in February, had called for discussions on implementation of the agreement every six months. Chinese Vice Premier Liu He was supposed to hold a video conference call with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, but it was postponed indefinitely. On Wednesday, Chinese Foreign Ministry spokesman Zhao Lijian deferred comment to the “competent department” when asked about Trump’s remarks on the trade talks.
Chinese stocks slumped, led by biotech shares, amid growing concern over tensions between the world’s biggest economies. The CSI 300 fell 1.5% at the close, the largest decline in nearly a month, while the tech-heavy ChiNext gauge slumped 3.3%.
Talks between the U.S. and China continue regularly at lower levels, according to Greg Gilligan, chairman of the American Chamber of Commerce in China. While the purchases by China could be happening more quickly, “there is absolutely commitment and progress that’s occurring” he said Wednesday. “I think both sides recognize that this is really the glue that is holding the relationship together. There’s not an awful lot of other channels of communication that are working well,” Gilligan said. “So that’s a reason for some optimism in an otherwise pretty bleak scenario in the larger relationship.”
‘Addressing whether the U.S. would pull out of the phase-one deal, Trump said: “We’ll see what happens.” Terminating the deal would require a written notification and take effect 60 days later, unless both parties agree on a different date.
The talks never made it on to any official public calendar in Washington or Beijing, but the South China Morning Post reported that they were set for last Saturday. Earlier, Chinese foreign ministry spokesman Zhao Lijian said that information on high-level talks will be released “in due course.”