After a “wonderful and very warm dinner” with China’s President Xi Jinping, last weekend, President Donald Trump launched a barrage of tweets extolling his great accomplishments. The Chinese, he said, had agreed to remove a 40% tariff on American car imports; they would soon start buying US agricultural products; they had apparently made major concessions as part of a 90-day pause in raising tariffs. The stock markets revved up for a big jump, believing Trump’s damaging trade war was coming to an end.
But a serious problem became apparent before long: China was not confirming the details that made Trump’s claims so encouraging. Reluctantly optimistic investors drove the market higher on Monday.
But by Tuesday, as China’s state-controlled media specifically noted that there was “no confirmation from Beijing” about parts of Trump’s claims, stock markets fell into avertiginous downward spiral. The Dow dropped a whopping 799 points.