A trade deal worth $200 billion between China and the United States is "fully intact," President Donald Trump said Monday night, just hours after his senior trade adviser rattled markets by saying the pact was "over."
Trump waded in on Twitter to reassure markets that the agreement between the world's two largest economies — which took almost two years of wrangling — was still in play.
Earlier on Monday when asked about the trade agreement, White House trade adviser Peter Navarro told Fox News "it's over."
Navarro, an outspoken China critic and director of trade and manufacturing policy at the White House, said the "turning point" had been in January when the U.S. had learned about the coronavirus only "minutes after wheels up," once a Chinese delegation had left Washington, he said, following the signing of the first part of the agreement.
The adviser's comments injected a strong dose of volatility into global markets with currency and futures markets dipping and Asia Pacific stocks falling into negative territory, before recovering after Navarro issued a statement that his comments had "been taken wildly out of context."
And that the trade deal "continues in place," walking back his earlier remarks.
"They had nothing at all to do with the Phase I trade deal, which continues in place. 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," he said.
Reacting to the contradictory messages emanating from the White House, China's Foreign Ministry spokesman Zhao Lijian said that Navarro had "no credibility."
"The American politician you mentioned is speaking complete nonsense and ridiculous," Zhao said when asked about Navarro during a press briefing on Tuesday.
"China's position on China-U.S. economic and trade issues is consistent and clear," he added, with no further remarks.
Chinese shares ended higher on Tuesday, as investors were reassured by President Trump's clarification that the trade deal remains in place.
Navarro wrote books entitled "The Coming China Wars," and "Death by China: Confronting the Dragon," before joining Trump's White House.
He is among Trump's senior officials who have angered China by referring to the disease as the "China virus" and has pointed the finger at Beijing for the spread of the respiratory illness, first detected in the Chinese city of Wuhan in 2019.
The U.S.-China trade pact was welcomed by economists earlier this year, after almost two years of tariffs and tensions between the countries. The economic fall-out weighed on financial markets and heaped tariffs of $370 billion of Chinese products, denting global growth.
In January, the U.S. and China signed an interim 'Phase 1' trade deal that capped the bitter 18-month battle, with China pledging to boost purchases of U.S. goods by $200 billion over two years, and was hailed an economic-win by deal-maker Trump.
But disruptions wrought by the coronavirus pandemic saw U.S. goods exports to China fall in the first quarter and in May, Trump said he was "very torn" about whether to end the Phase 1 deal.
As well as tensions over trade, the shock of the coronavirus pandemic has led to worsening relations between the two powers, with increasingly harsh rhetoric from Washington and Beijing inflaming tensions, that some analysts have deemed a new Cold War.
Navarro said on Twitter earlier this month that President Trump had built the "most beautiful economy in history, but China virus threw 30 million Americans out of work." Adding that Trump "WILL rebuild."
However, U.S. economists warn that the country cannot afford to boycott Beijing.
American soybean farmers, in particular, heavily rely on China's buying power and hope that the trade deal can survive the ongoing war of words.
According to a book published Tuesday by former national security adviser John Bolton, Trump specifically asked Chinese leader Xi Jinping to agree to buy more soybeans and wheat from the U.S., in a bid to support his November election and curry favor with rural Midwestern voters.
NBC News was not able to verify the claims in Bolton's book.