Trump on Tuesday suggested to reporters in London that a trade deal with Beijing might come much later than many expected, saying "in some ways I think it's better to wait for after the election if you want to know the truth."
This contradicts Trump's earlier statements about negotiations going well. But investors chose to focus on the downside risk, because a trade deal between the United States and China has been pretty much priced in ever since the two countries came to a preliminary verbal agreement in October. This agreement was never signed.
But other trade headlines are also spooking investors as well. For example, the United States proposed tariffs on French goods like cheese and champagne on Monday, in response to France's digital tax aimed at Googl (GOOGL)and Faceboo. (FB)
Meanwhile, President Trump threatened to slap tariffs on aluminum and steel imports from Brazil and Argentina given the "massive devaluation of their currencies."
Amid all this, stocks are sliding. The Dow (INDU) fell as much as 426 points, or 1.4%, before bouncing back slightly. The S&P 500 (SPX) was down 1.1%, and the Nasdaq Composite (COMP) was off by 1.2%.
Although investors reacted negatively to the headlines, this song and dance has been repeated over and over during the course of Trump's presidency.
"We have seen this movie many times before ... where the president throws out remarks during trade talks that in retrospect have just been a negotiating tactic, especially when he starts off by saying China wants a deal more than he does," said Chris Rupkey, chief financial economist at MUFG.
On Monday, the three indexes recorded their worst one-day percentage drop in two months.
Trade uncertainty is back with a vengeance.
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December 03, 2019 at 10:09PM
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Dow falls more than 400 points after Trump warns China trade war could go beyond 2020 election - CNN
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