WASHINGTON (AP) — The Latest on the US-China trade truce (all times local):
A lack of clarity around a U.S.-China trade truce, announced over the weekend by the Trump administration, is contributing to a sharp fall in the stock market.
The Dow Jones industrial average plummeted 586 points in early afternoon trading, a drop of 2.3 percent. Other market indexes also fell sharply.
Also contributing to the decline are increased fears about future U.S. economic growth. The yield on the 5-year Treasury note has fallen below the yield on the 2-year note, a move that suggests investors are fearful about the economy's longer-term health. In the past, when longer-term yields have fallen below shorter ones, that has signaled a potential recession could follow within a year or so.
Regarding the China trade deal, White House officials have struggled to explain, for example, whether China has actually agreed to drop its 40% tariffs on U.S. autos. And Treasury Secretary Steven Mnuchin said Tuesday on the Fox Business Network that China agreed to buy $1.2 trillion of U.S. products, but added, "if that's real" it would close the trade deficit with China and said "we have to have a negotiated agreement and have this on paper."
Treasury Secretary Steven Mnuchin says that China has made a commitment to purchase an additional $1.2 trillion in U.S. exports in coming years and, "if that's real," it will be enough to close America's huge trade deficit with China.
Mnuchin says that China has made "very big commitments" for increased purchases of agricultural products, liquefied natural gas, industrial products and autos.
In an interview Tuesday on the Fox Business Network, Mnuchin says that the commitments to increase agricultural purchases "will be the first thing that gets addressed in the next few weeks."
He added that, "we have to have a negotiated agreement and have this on paper but if that's real that will close the trade deficit."
The administration said over the weekend that it would postpone for 90 days the imposition of more tariffs on China to give both countries time to negotiate a long-term trade deal.
President Donald Trump is signaling caution on his trade truce with China, saying his team is working to see whether a "REAL deal" is doable and stressing "I am a Tariff Man."
Trump tweeted Tuesday that the negotiations with China have begun. He says the talks will end in 90 days, "unless extended," suggesting there is flexibility to that deadline.
Trump adds: "President Xi and I want this deal to happen, and it probably will. But if not remember, I am a Tariff Man." He says tariffs "will always be the best way to max out our economic power."
The Trump administration reached a 90-day trade truce after a lengthy dinner Saturday between Trump and Chinese President Xi Jingping. Trump has described the truce as a breakthrough, but details on the agreement have been limited.