Mere minutes after the S&P closed at its lowest level since October of last year following another brutal session for US stocks (as investors were shaken by Jeff Gundlach's 'truth bombs' and the looming Fed rate hike), President Trump was out with a tweet that, we imagine, was intended to inspire confidence - but instead may have inadvertently raised questions about the prospects for a lasting trade truce.
Trump tweeted Monday afternoon that he had authorized Secretary of Agriculture Sonny Perdue to move ahead with the second round of farm subsidies ("Market Facilitation Payments") that the administration had authorized over the summer after China retaliated against the US by slapping tariffs on US agriculture imports like soybeans.
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Though the subsidies hadn't offset the trade war's brutal impact on soybean farmers, relief for America's beleaguered farmers finally arrived earlier this month when Chinese importers bought 500,000 in US soybeans, purportedly as a gesture of good faith following a "trade truce" struck by Trump and Chinese President Xi Jinping on the sidelines of the G-20 Summit in Argentina.
Perdue said that he's set to release more details about the payments on Monday.
Today I am making good on my promise to defend our Farmers & Ranchers from unjustified trade retaliation by foreign nations. I have authorized Secretary Perdue to implement the 2nd round of Market Facilitation Payments. Our economy is stronger than ever–we stand with our Farmers!— Donald J. Trump (@realDonaldTrump) December 17, 2018
The tweet settled speculation in the agricultural press about whether Trump would continue with the payments following the temporary truce.
But some might interpret Trump's decision as a sign that expectations for talks with China are low, and that Trump needs to hedge.