U.S. President Donald Trump said the phase one trade deal with China was “fully intact,” after his adviser Peter Navarro sowed confusion and spurred a temporary stock slump with comments interpreted as a decision to end the agreement.
“The China Trade Deal is fully intact. Hopefully, they will continue to live up to the terms of the Agreement!” Trump said in a Twitter post late Monday.
Navarro had responded to a long question by Fox News interviewer Martha MacCallum asking whether aspects of the deal were “over” by saying: “It’s over. Yes.”
U.S. futures swung wildly with the yuan as the remarks caused concern that the deal signed in January, which paused the trade war between the world’s two largest economies, was in jeopardy. Navarro later said his comments “have been taken wildly out of context.”
Chinese officials have insisted that they intend to stick to the deal, which implies increasing imports from the U.S. by a total of $200 billion over two years. The economic slump caused by the coronavirus has made reaching those targets doubtful, though the U.S. had signaled some flexibility.
Navarro isn’t the decisive voice on the future of the trade deal. The architect of the agreement, Trade Representative Robert Lighthizer, said last week that the phase one agreement was “enforceable” and the U.S. fully intended to carry it through.
China’s foreign ministry, which has previously denounced Navarro as a “habitual liar,” dismissed his latest remarks, referring questions about the trade deal to “the competent authority.”
“You referenced some words by Mr. Navarro,” ministry spokesman Zhao Lijian told a regular news briefing Tuesday in Beijing. “He has a habit of talking out of his hat. There is no credibility to what he said.”