US President Donald Trump on Tuesday warned he would be “tougher” on Beijing in a second term if trade talks dragged on, compounding market fears that ongoing trade disputes between the United States and China could trigger a US recession.
The world’s two largest economies imposed fresh tariffs on each other on Sunday, ratcheting up a tit-for-tat tariff war that has unsettled financial markets and raised the specter of a global recession. US and Chinese negotiators are due to meet in person in Washington this month, but no date has yet been set.
US stocks fell on Tuesday as data showed factory activity contracted for the first time since 2016 in August, while the benchmark 10-year US Treasury yield fell to its lowest since July 2016.
Trump, ignoring recent negative US economic data, said in a posting on Twitter that the United States was “doing very well in our negotiations with China,” and played up the damage US tariffs were doing to the Chinese economy.