The pulse between the United States and China, the two largest economic powers in the world, has scared the markets this Monday night.
Peter Navarro, the White House trade adviser, has given up as “broken” the pre-agreement reached between the two countries to bury their trade war, weighing down Asian markets, the yuan and futures on Wall Street.
Less than an hour later, Donald Trump has called for calm with a message on Twitter in which he assured that the pre-agreement was “intact”. In the afternoon, the Trump Administration had announced that it classified four major Chinese media outlets as foreign embassies on the grounds that they serve as spokespersons for the regime.
Navarro, one of Trump’s hardline advisers, considered the pre-agreement with China finalized during an interview on the Fox television network and attributed it to the anger of the United States because Beijing had not reported before the coronavirus outbreak. “It is over,” Navarro said, citing as a “turning point” the moment in which the US government learned of the expansion of covid-19, just a week after a Chinese delegation had visited Washington for the signing of phase 1 of the agreement, on January 15.
“It happened when they had already sent hundreds of thousands of people to this country to spread the virus and just a few minutes after the plane took off we began to hear about this pandemic,” criticized the adviser. Wall Street futures, the yuan offshore and Asian stocks began to burn in the hands of investors and fell in price.
Soon after, when Trump posted his tweet, the market picked up. “The China trade agreement is completely intact and I hope they will abide by its terms,” he stressed.
The episode took place on the same day that Washington rated China Central Television, the China News Service, on People’s Daily and the Global times as “propaganda media,” in the words of David Stilwell, senior diplomat for East Asia. Last March, China expelled US national correspondents from newspapers.
The Washington Post, The New York Times and The Wall Street Journal in retaliation for the departure of 60 Chinese employees from the correspondents of their state media in the United States. The relationship between the two powers is going through its worst moment in four decades, aggravated by this pandemic.