White House scrambles to deny Trump trade adviser's claim that China deal is 'over'

The White House’s stance on China was thrown into confusion on Monday night after trade adviser Peter Navarro announced a trade deal between the two countries was “over”, only to be quickly contradicted by Donald Trump.

Navarro told Fox News the “turning point” came when the US learned about the coronavirus only after a Chinese delegation had left Washington following the signing of the phase one deal on 15 January.

“It was at a time when they had already sent hundreds of thousands of people to this country to spread that virus, and it was just minutes after wheels up when that plane took off that we began to hear about this pandemic,” said Navarro, one of the most outspoken critics of China among Trump’s senior advisers.

“It’s over,” he said.

But shortly after, the US president tweeted: “The China trade deal is fully intact. Hopefully they will continue to live up to the terms of the agreement!”

Navarro then said his comments had been taken out of context. “They had nothing at all to do with the phase one trade deal, which continues in place,” he said, and instead referred to “the lack of trust we now have in the Chinese Communist party”.

Navarro’s initial comments caused momentary panic on the markets, with contracts on the S&P 500 index falling as much as 1.6%, according to Bloomberg, and the offshore yuan weakening.

Trump has recently placed great store by the China trade negotiations, saying in an interview published on Sunday that he held off on imposing tougher sanctions over China’s treatment of its Uighur Muslim minority because of concern such measures would have interfered with trade negotiations.

“Well, we were in the middle of a major trade deal. And I made a great deal, $250bn potentially worth of purchases,” Trump told Axios when asked why he had not enacted Treasury sanctions against communist party officials linked to repression in the Xinjiang region.

Navarro’s comments came the same day the US tightened rules on four more Chinese state media organisations, denouncing them as propaganda outlets.

The State Department said it was reclassifying China Central Television, the China News Service, the People’s Daily and the Global Times as foreign missions rather than media outlets in the US, adding to five others designated in February.

All nine outlets “are effectively controlled by the government of the People’s Republic of China,” State Department spokeswoman Morgan Ortagus said.

“These four entities are not media outlets; they are propaganda outlets,” David Stilwell, the top US diplomat for East Asia, told reporters.

US-China relations have reached their lowest point in years after the coronavirus pandemic spread from China to hit the US hard. President Donald Trump and his administration have repeatedly accused Beijing of not being transparent about the outbreak.

On Thursday last week, Trump renewed his threat to cut ties with China, a day after his top diplomats held talks with Beijing and his trade representative said he did not consider decoupling the US and Chinese economies a viable option.


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