Update (1230ET): Though it took a few minutes, the market eventually caught on to the trade headlines and has come off its highs of the session as Trump told reporters that he the Phase 2 deal is no longer on his agenda.
"I don't think about it now," he said.
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One day after Democratic nominee Joe Biden tried to shameless ape the president's rhetoric on protecting the American worker, President Trump is once again ratcheting up his rhetoric on China, saying for the first time that a 'Phase 2' trade deal is 'unlikely' due to China's handling of the coronavirues, which has "severely damaged" the bilateral relationship.
- TRUMP SAYS PHASE TWO CHINA TRADE DEAL UNLIKELY AT THIS POINT
- TRUMP: OUR RELATIONSHIP WITH CHINA IS SEVERELY DAMAGED
It's probably safe to assume that 'Phase 1' is now all but dead (though China may or may not continue buying American agricultural commodities and energy products for as long as it wants, or needs, to), which is hardly surprising: skepticism about China holding up its end of the bargain was high from the beginning, anyway.
Trump made the comments aboard Air Force One, saying: "They stopped it from going into the remaining portions of China from Wuhan province. They could have stopped the plague, they didn’t. The relationship with China has been severely damaged."
On Air Force One.. POTUS told reporters that he is not thinking about a Phase 2 trade deal with China. POTUS says, “Honestly, I have many other things in mind”. President Trump added that the relationship with China has been severely damaged by the #Coronavirus #China #Trade— Edward Lawrence (@EdwardLawrence) July 10, 2020
President Trump added about a Phase 2 trade deal with China, “They stopped it from going into the remaining portions of China from Wuhan province. They could have stopped the plague, they didn’t. The relationship with China has been severely damaged.” #China #Trade— Edward Lawrence (@EdwardLawrence) July 10, 2020
Back in May, Trump said he was “very torn” about whether to scrap the 'Phase 1' deal in retaliation, or keep it in place. Others - including Treasury Secretary Mnuchin - have defended the deal, and assured the public it would remain in place.
However, Pete Navarro elicited a ton of flack from Mnuchin, Kudlow and their allies when he told a Fox reporter that P1 was "over". He was forced to walk back those comments, but we suspected there was more truth to them than the administration would admit.