After US Treasury Secretary Steve Mnuchin declared that the Trump administration would delay implementing sweeping tariffs on Chinese goods, shares of US Steel dropped 1.1 percent and AK Steel Holding Corp. declined 2.6 percent in premarket trade Monday.
During negotiations over the weekend, China reportedly consented to continue discussing measures under which it would purchase more US products in order to reduce the $335 billion annual trade deficit between the two, but no specific dollar number was put forward.
On Monday, Mark Zandi, Moody’s chief economist told CNBC that the new agreement is “lose-lose,” describing it as “face-saving” because the US and China are “clearly” not coming to terms on anything, “at least, not in the near-term.” Before this weekend’s announcement, Donald Trump had demanded that China close its trade surplus with the US by $200 billion. Zandi noted that US exports to China currently total $150 billion annually, and the US does not have the capacity to produce and export that scale of increase in goods to China.
“What's that going to buy? For $200 billion?” Zandi asked anchors of CNBC’s “Squawk Box Europe”. “We don't want to sell them technology, where our comparative advantage is, so we're going to sell them $200 billion more of what? Soybeans? Boeing aircraft?” Zandi said discussions should have been focused on structural issues like intellectual property protection for investors; the trade deficit figure, he said, should not be the focus of the US-China trade relationship.