This morning President Donald Trump told reporters at the Group of Seven summit that over the weekend there had been significant progress in negotiations to end the U.S.-China trade war.
“We’ve gotten two calls and very, very good calls,” Trump told reporters at the Group of Seven summit. “Very productive calls. They mean business. They want to be able to make a deal.”
This would be good news–if true. The problem is that the comments echo those that the President has made over the last year that have raised hopes only to have them dashed by the actual course of the talks. Trump insisted that this time is different and that the new talks “were much more meaningful than at any time.”
Administration officials were not especially positive about the content of the talks. “There were discussions that went back and forth, let’s leave it at that,” Treasury Secretary Steven Mnuchin told reporters.
And Chinese sources refused to confirm the talks. Chinese Foreign Ministry spokesman Geng Shuang told reporters “Regarding the phone call in the weekend, I am not aware of that.”
And financial markets, while up on the news, seem skeptical. As of 1 p.m. New York time the Standard & Poor’s 500 was ahead 0.93%, itself not an especially strong vote of confidence in the President’s statements. By 2:40 p.m the index’s gain was down to 0.77%. Other indexes followed a similar pattern. The Dow Jones Industrial Average, which had been up 1.01% at 1 p.m., had slipped to a gain of 0.79% by 2:40, for example.
Reflecting what seems to be a general skepticism that these phone calls repaired all the damage from Friday’s increase in tariffs by, first, China and, then, the United States and from Trump calling China’s President Xi Jinping an “enemy,” risk hedges are down only modestly with the the SPDR Gold Shares ETF (GLD), for instance, down only 0.06% as of 2:40 p.m.
The yield on the 10-year Treasury was steady at 1.54%. The yield on the 2-year Treasury matched the yield on the longer note at 1.54%.
