US President Donald Trump speaks in London, the UK, December 3 2019. Picture: AFP/NICHOLAS KAMM
US President Donald Trump speaks in London, the UK, December 3 2019. Picture: AFP/NICHOLAS KAMM

London  — President Donald Trump signalled he would be willing to wait for another year before striking a trade agreement with China, casting doubt on the likelihood of a phase-one accord within weeks between Washington and Beijing.

“I have no deadline,” he told reporters on Tuesday in London when asked if he wanted an agreement by year's end. He said later in a meeting with Canadian Prime Minister Justin Trudeau that he would not sign an agreement unless it was  a “good deal”.

“If it’s not going to be a good deal, I’m not signing a deal,” he said. “It can’t be an even deal. If it’s an even deal, it’s no good.”

Stocks tumbled in Europe and the US as Trump’s comments indicated no urgency to reach a deal by December 15, which US commerce secretary Wilbur Ross on Monday called a “logical deadline”. The Trump administration has threatened to impose tariffs on more Chinese imports starting that day. Those levies would hit US consumer products such as smartphones, toys and children’s clothing.

The S&P 500 Index was down about 1.2% before midday in New York, falling for a third day running. Treasuries rallied.

“I don’t watch the stock market,” Trump said. He regularly issues celebratory tweets when the bourse hits highs.

“Jobs are what I watch,” he continued. “I watch: making the proper deal.”

A flurry of US trade moves in the past 24 hours has eroded investor optimism that Trump would ease up on tariffs that have slowed the global economy. Rather than ratcheting down trade tensions, Trump is indicating confidence that his import taxes are good for America.

“US markets are up as much as 21% since the announcement of Tariffs on 3/1/2018 — and the US is taking in huge amounts of money (and giving some to our farmers, who have been targeted by China)!” Trump tweeted on Monday.

Speaking to reporters on a trip to attend a summit for the 70th anniversary of defence alliance Nato, Trump suggested that in some ways, it might be better to wait until after the US presidential election next November.

“I like the idea of waiting until after the election for the China deal. But they want to make a deal now and we’ll see whether the deal is going to be right. It’s got to be right,” he said. “The China trade deal is dependent on one thing: Do I want to make it? Because we’re doing very well with China right now and we could do even better with the flick of a pen.”

The US and China have been trying to conclude phase one of a trade deal that White House economic adviser Larry Kudlow said more than two weeks ago was “coming down to the short strokes”.

Stocks have jumped to records on optimism about a truce in the 20-month tariff war between the world’s two largest economies that led to tariffs on about  $500bn in bilateral trade.

Earlier on Tuesday, Chinese state media said the Beijing government would soon publish a list of “unreliable entities” that could lead to sanctions against US companies, signalling trade talks between the two nations are increasingly under threat from disputes over human rights in Hong Kong and Xinjiang.

With assistance from Jonathan Stearns and Zoe Schneeweiss.

Bloomberg