The evolving trade narrative took an abrupt – albeit wholly predictable – turn for the worse on Friday afternoon when Reuters reported that Chinese officials canceled a scheduled visit to Montana.
For those who might have missed it on Thursday, the Chinese delegation led by Vice Minister for Agriculture and Rural Affairs Han Jun, planned to visit Bozeman, Montana and Omaha, Nebraska, following working-level talks aimed at setting the stage for principal-level discussions between Liu He and Bob Lighthizer in Washington next month.
In addition to canceling the Montana visit, the Chinese agricultural officials are said to be returning to China “sooner than expected”. US markets were not amused. Stocks sank as the headlines crossed and ultimately, Wall Street closed on the lows.
Sonny Perdue had touted the farm country visits as an effort to “build good will”. Based on that, you can draw your own conclusions as to what the cancelation of those plans might mean.
The news came just an hour or so after Donald Trump, during a joint press conference with Australia’s Scott Morrison, said he didn’t need a trade deal with China before the 2020 election.
The US president also suggested he may not be willing to support an interim deal after all. The prospect of a limited, stopgap agreement buoyed sentiment earlier this month as market participants looked ahead to October’s high-level talks. Investors also took comfort in the White House’s decision to delay a planned tariff hike until mid-October.
On September 13, China added some US farm products to a tariff exemption list, a conciliatory act seen as offering still more evidence to support the contention that yet another ceasefire may be in the cards.
But, on Thursday, Global Times editor Hu Xijin suggested that US negotiators may have mistaken kindness for weakness. “China doesn’t like talking tough before the negotiations, but I know China is not as anxious to reach a deal as the US side thought”, Xi’s media man said. Around the same time, Trump’s China muse Michael Pillsbury was quoted by SCMP as saying tariffs could go to 50% or even 100% if Trump doesn’t get his way.
As far as what happened on Friday afternoon, details were initially sparse.
According to Nicole Rolf, the Montana Farm Bureau Federal Director of National Affairs, there was no explanation provided as to why Chinese officials cut their trip short.
Rebecca Colnar, a spokeswoman for the group, told Bloomberg that the Chinese embassy informed them of “an adjustment of their agenda” which compelled the officials to head back home sooner than planned.
Later, Christin Kamm, public information officer for the Nebraska Department of Agriculture said they too “were informed this morning the Chinese delegation will no longer visit”.