Doubts emerge about US.-China trade deal

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Wariness over the strength of an agreement hammered out between the U.S. and China last week was growing on Monday after reports that Beijing wants more talks before signing any such deal., though U.S. Treasury Secretary Steven Mnuchin remained confident a deal would be concluded.

While a rise in U.S. tariffs on Chinese imports due Tuesday will not now go into effect after President Trump announced at least a partial deal late Friday, no White House decision has been made yet on planned on a new 15% tariff set to go into effect on Dec. 15 on about $160 billion in annual Chinese imports. U.S. Treasury Secretary Steven Mnuchin told reporters on Monday that if a deal isn't in place by December, those tariffs will go ahead, but he also said, "I expect we will have a deal."

After Mnuchin spoke, Hu Xijin, the influential editor-in-chief of China's state-controlled Global Times, tweeted that China's attitude about a deal remains "positive":

Based on what I know, China-US trade talks made breakthrough last week and the two sides have the strong will to reach a final deal. Initial statement of the Chinese side is moderate. This is China's habit. It doesn't mean China's real attitude is not positive.

- Hu Xijin 胡锡进 (@HuXijin_GT) October 14, 2019

Meanwhile, the China-owned English newspaper China Daily said in an article Monday while the forward steps in trade talks were "encouraging," a "partial deal, if inked doesn't mean the trade row has been settled once and for all."

As part of the deal, the U.S. postponed a planned tariff increase on $250 billion in Chinese imports from 25% to 30%, originally set to take effect Tuesday, in exchange for Chinese promises to buy $40 to $50 billion in American agricultural products annually though that would be double the $24 billion China bought in 2017.

A bigger trade deal will come over time in three stages, according to Trump, with more divisive issues to be addressed later. These include Chinese practices that the U.S. alleges but Beijing denies, such as forced transfers of U.S. technology to its economic rival.

Earlier citing sources, Bloomberg reported Monday that China wants further discussions as soon as the end of October, to smooth out details of the so-called "Phase 1" trade deal announced by President Donald Trump that will delay a tariff hike, boost Chinese agricultural purchases and address foreign currency levels. The agreement was not set out in writing, and only in principle.

One of the sources told Bloomberg that Beijing could send a delegation led by top negotiator Vice Premier Liu He to put the final touches on a written deal in time for a signing at next month's Asia-Pacific Economic Cooperation presidents meeting in Chile.

U.S. stocks traded mostly lower Monday morning as investors re-evaluated the"phase-one" trade deal between the U.S. and China, announced in the final minutes of trade Friday, with growing concern that the agreement will not lead to significantly lower trade barriers or greater certainty over Sino-American trade relations.

The Dow Jones Industrial Average rose 2 points, or less than 0.1% to 26,818, while the S&P 500 index lost 4 points, or 0.1%, to 2,967. The Nasdaq Composite index , meanwhile, fell 14 points, or 0.2%, to 8,043. On Friday, in the wake of the trade deal news, the Dow rose 319.92 points, or 1.2%, to 26,816.59, the S&P 500 advanced 32.14 points, or 1.1%, to 2,970.27, while Nasdaq gained 106.26 points, or 1.3%, to 8,057.04

Morgan Stanley analysts advised investors to remain cautious over any big breakthrough deal. "There is not yet a viable path to existing tariffs declining, and tariff escalation remains a meaningful risk," they wrote in the note to clients. "Thus, we do not yet expect a meaningful rebound in corporate behavior that would drive global growth expectations higher."