Trade deal only after US election: Trump's remarks bash markets

London

US President Donald Trump said a trade agreement with China might have to wait until after the US presidential election in November 2020, denting hopes of a quick resolution to the dispute which has weighed on the world economy.

"I have no deadline, no. In some ways, I think it's better to wait until after the election with China," Mr Trump told reporters on Tuesday in London where he was due to attend a meeting of Nato leaders. "But they want to make a deal now, and we'll see whether or not the deal's going to be right, it's got to be right," he added.

Stocks dropped in Europe and US equity futures sold off as Mr Trump's comments indicated no urgency to reach a deal by Dec 15, which US Commerce Secretary Wilbur Ross on Monday called a "logical deadline".

The Trump administration has threatened to impose tariffs on more Chinese imports starting that day. Those levies would hit American consumer products such as smartphones, toys and children's clothing in the days before the Christmas holiday.

Investors have been hoping that the US and China can avert an escalation of trade tensions which have slowed global economic growth.

Washington and Beijing have yet to ink a so-called "phase one" agreement announced in October, which had raised hopes of a de-escalation in their prolonged trade war.

Mr Trump said a deal with China would only happen if he wanted it to, and that he thought he was doing very well in the talks.

"I don't think it's up to them if they want to make it, it's if I want to make it," he said.

Mr Trump, who had said in September that he did not need a deal before the 2020 election, sought on Tuesday to put pressure on Beijing. "And China is paying for it, and China is having by far the worst year that they have had in 57 years. So we'll see what happens."

China reported its slowest economic growth in 27 years in October as the trade tensions with the US hit its manufacturing sector.

Delays in reaching a deal may undermine recent optimism that global growth had stabilised after slowing this year to its weakest since the financial crisis, largely because of uncertainty surrounding the outlook for global trade.

The US and China have been trying to conclude "phase one" of a trade deal that White House economic adviser Larry Kudlow said more than two weeks ago was "coming down to the short strokes". REUTERS, BLOOMBERG