WASHINGTON — The White House trade adviser, Peter Navarro, said on Monday night that the trade deal between the United States and China was “over,” briefly causing stock markets to dive before he and President Trump quickly walked back the remarks.
“The China Trade Deal is fully intact,” Mr. Trump wrote on Twitter after Mr. Navarro, a noted China critic, had appeared on Fox News. “Hopefully they will continue to live up to the terms of the Agreement!”
The events underscored the sensitivity of the “Phase 1” trade deal that the United States and China signed in January, which buoyed stock markets and brought to a close a prolonged and bruising trade war. But tensions have been rising sharply between the two countries over the origins of the coronavirus pandemic and China’s assertion of power over Hong Kong, putting that pact into an increasingly precarious position.
Mr. Trump’s tweet was his firmest defense of his signature trade deal in weeks. While some of the president’s advisers believe that he has little to gain politically from scrapping it, others have said that his dissatisfaction with China is growing, raising the question of whether the United States would challenge China’s compliance with the pact.
Mr. Trump has also turned increasingly critical of China because of the spread of the coronavirus, which originated in a city there, and its damaging effects on the United States economy. And agricultural groups that were intended to benefit from the trade deal have complained to the Trump administration that China is lagging significantly behind targets in its promised purchases of farm goods, and that Chinese buyers are bypassing American soybeans for Brazilian ones.
But in testimony before Congress last week, Robert Lighthizer, the United States trade representative and the deal’s primary architect, forcefully defended China’s progress in fulfilling the pact. He said that he was in frequent contact with Chinese officials and that they were working hard to live up to their agreements.
“Every indication is that in spite of this Covid-19, they are going to do what they say,” Mr. Lighthizer said.
In an interview on Monday evening, Martha MacCallum of Fox News asked Mr. Navarro about the president’s desire to maintain the deal as long as possible. “He wanted them to make good on the promises because there had been progress made on that trade deal, but given everything that’s happened and all the things you just listed, is that over?” she asked.
“It’s over. Yes,” Mr. Navarro responded, adding that the “turning point” was China’s failure to warn the United States about the dangers of the coronavirus, which was spreading even as they concluded the pact.
“It was just minutes after wheels up when that plane took off that we began to hear about this pandemic,” he said.
Shortly after the interview, Mr. Navarro issued a statement recanting the remarks, saying they had been taken “wildly out of context.”
“They had nothing at all to do with the Phase 1 trade deal, which continues in place,” Mr. Navarro said. “I was simply speaking to the lack of trust we now have of the Chinese Communist Party after they lied about the origins of the China virus and foisted a pandemic upon the world.”