Wall Street opened lower after President Donald Trump said a report about a trade deal with China was completely wrong, dashing hopes that the two sides would arrive at an agreement in time to avoid new tariffs scheduled for Sunday.
The announcement came two days before $160 billion in new US levies on Chinese products were set to take effect.
If it is signed, Trump's long-awaited deal will be a relief to Apple, among the USA companies with the most to lose in the trade war between the world's two largest economies, along with chipmakers who make the components in its devices, which are mostly made in China.
They said the two sides have agreed on a text for "phase one" of their trade negotiations.
The president approved. There was no confirmation from the Chinese, although officials have spoken more optimistically in recent days of their talks with the USA; they are expected to comment on the trade talks overnight and could confirm a deal on Friday. "They have agreed to many structural changes and massive purchases of Agricultural Product, Energy, and Manufactured Goods, plus much more.", Trump said on Friday.
Those second-round negotiations will commence prior to next November's US presidential election, Trump said.
The deal announced Friday leaves unresolved some of the thorniest issues. China agreed to significant purchases of US agricultural products, but failed to give a specific amount, disappointing some investors who expected a firmer commitment. Those complaints were the basis for Trump's tariffs and larger trade war in the first place.
Trump himself has blown hot and cold, repeatedly insisting that China needs a deal more than the United States does.
One of these people told Reuters that US President Donald Trump and his top advisers agreed on the terms for a proposal, possibly a final offer, and were now waiting for Beijing to sign off in writing.
The Dec. 15 tariffs are due to apply to about $156 billion worth of Chinese consumer goods including cell phones, clothes, laptops, and toys.
Yet its impact on structural issues that motivated the trade war, such as Chinese state subsidies and intellectual property concerns, is less clear.
China also said it will reinstitute on December 15 an additional 25 percent tariff on US -made vehicles and 5 percent tariffs on auto parts that had been suspended at the beginning of 2019. They want it, and so do we!'
The proposed tariffs would have included popular items such as Made-in-China smartphones, tablets and laptops, and therefore would have delivered "a major gut punch" to Apple and semiconductor makers, according to Wedbush Securities analyst Dan Ives. Before the meeting, the United States Trade Representative Robert Lighthizer presented the outlines of the partial deal which were approved by the President. "Many of us are highly skeptical that the agreement will be enough to outweigh these other costs", Lovely said. "Nobody believes we're likely to see much escalation on the trade front from Trump toward the Chinese".