Lull Before the Storm? Why US-China 'Truce' is Fraught With Risks

DEVELOPING: US-China trade uncertainty fuels market plunge

Global markets cheered the weekend accord on Monday, only to reverse course Tuesday as doubts emerged over exactly what the world's two largest economies had agreed on.

The Chinese have not acknowledged a 90-day deadline for the talks or said that they plan to "immediately" increase purchases of United States farm goods.

On Wednesday, Trump tweeted that "very strong signals" were being sent by China regarding trade with the United States.

Trump and Xi said they would hold off on imposing additional tariffs for 90 days starting on December 1 while they sought to resolve their trade disputes that have seen the flow of hundreds of billions of dollars worth of goods disrupted by tariffs.

He concluded by describing himself as a "Tariff Man", adding that the U.S.is "now taking in $billions in Tariffs".

"Trump said China is planning to resume buying USA soybeans and natural gas, which he said confirms his claims that China had agreed to start "immediately" buying US products".

Treasury Secretary Steven T. Mnuchin said on Fox News that China would face "tariffs without reciprocal tariffs attacking us" if Beijing doesn't meet certain commitments made at last week's Group of 20 summit.

Meanwhile, White House National Economic Council Director Larry Kudlow said there wasn't an actual agreement for China to remove auto tariffs, but that he expected China to eventually do it as a measure of good faith.

The Chinese government says it will push forward trade negotiations with the United States in the next 90 days, expressing "confidence" that an agreement can be reached even as concerns remain over whether the two sides can resolve their deep differences.

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Noting the applause at the end of Xi-Trump summit, Mr Geng asked: "I don't know (what) people clapping at that time now mean by saying this type of thing".

Instead, the two sides are to negotiate over USA complaints about China's trade practices, notably that it has used predatory tactics to try to achieve supremacy in technology.

But he added, "if that's real" - raising some doubt - it would close the USA trade deficit with China, and 'we have to have a negotiated agreement and have this on paper'. This fundamental misunderstanding of economics, combined with his reckless announcement of the detente that wasn't, scared investors and continues to undermine his administration's efforts at reaching a real trade deal with China.

"Ultimately, I believe, we will be making a deal - either now or into the future", he wrote.

BMW, the largest exporter of American-made vehicles has been planning to boost output of utility vehicles from its Spartanburg, South Carolina plant with the launch of its new flagship, the X7 SUV - many of them bound for China. China's crude oil imports from the US had ground to a halt.

In late November, his office released a damning report on Chinese trade practices that gave China a low grade on resolving complaints on hacking, intellectual property theft, and forced technology transfers. The statement did not mention Trump or Xi, however the state news agency Xinhua later said the ministry statement was hailing their meeting.

Chinese officials have been told to take necessary steps for the soybeans and liquefied natural gas purchases, according to two officials with knowledge of the discussions. The company said it wants to ramp up production in North America and is considering - although hasn't yet decided - whether to set up a second plant in the U.S.to make power trains.

Among the conflicting assertions that White House officials made was over whether China had actually agreed to drop its 40 percent tariffs on U.S. autos. The Dow finished the day just a hair over 25,000 points-meaning that the stock market has been basically flat since March 1, when Trump announced the first round of tariffs and the Dow was sitting at 24,600 points.

The US President said China was supposed to begin buying US agricultural products and others "immediately" as part of an agreement to reduce the trade imbalance between them.

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