US trade adviser China trade deal remarks hit Asian markets

Asian markets were thrown into turmoil overnight after US trade adviser Peter Navarro said the US-China trade deal was “over”, only to be immediately contradicted by President Donald Trump.

In an interview with Fox News, Navarro said the “turning point” came when the US learned about the spread of the coronavirus only after a Chinese delegation had left Washington following the signing of the phase one deal on 15 January.

“It was at a time when they had already sent hundreds of thousands of people to this country to spread that virus, and it was just minutes after wheels up when that plane took off that we began to hear about this pandemic,” he said. “It’s over,” he added.

The comments caused panic among investors, with the MSCI index of Asia Pacific shares outside of Japan falling to 509.9 before rebounding 0.72% to 517.1 points. Contracts on the S&P 500 index fell by as much as 1.6% and the offshore yuan weakened.

However, Trump was swiftly on social media to contradict Navarro's remarks: “The China trade deal is fully intact. Hopefully they will continue to live up to the terms of the agreement!”

Navarro then said his comments had been taken out of context, claiming they had "!nothing at all to do with the phase one trade deal, which continues in place” he said, falling back into line with Trump, and instead referred to “the lack of trust we now have in the Chinese Communist party”.