Confirming the Trump tweet from Sunday. Comments crossing from US trade representative Lighthizer and US Treasury Secretary Mnuchin:

  • Lighthizer says over the course of the last week we have seen an erosion in commitments from China
  • Mnuchin says China moved away from language in the agreement that would have changed it substantially
  • Lighthizer says China was reneging in commitments
  • Lighthizer says over the last week or so the Chinese pulled back, and that was what precipitated trump's tweet
  • Lighthizer says we are continuing talks, China delegation will be here Thursday and Friday
  • Lighthizer says he expects that the Chinese vice premier will attend the talks on Thursday and Friday
  • Mnuchin says it would be unfortunate if we cannot conclude an agreement
  • Mnuchin says the entire economic team is unified in recommending to trump that the US go ahead with tariffs if there is not an agreement by Friday
  • Lighthizer says we had good commitments on eliminating market distorting subsidies
  • Mnuchin says we had hoped to conclude a deal by the end of this week one way or another
  • Mnuchin says we are not going to negotiate to go backwards, says we have negotiated in good faith
  • Lighthizer says trump would like a deal with substantial structural changes, that is not where we are right now
  • Lighthizer says ustr will probably put out a notice on Tuesday about the increase in tariffs to 25 pct on $200 bln of Chinese goods
  • Mnuchin says if we hear something different from the Chinese this week, we will report that to trump
  • Mnuchin says the reaction by the stock market is not playing into consideration about the tariffs
  • Mnuchin says if the Chinese changed position, the US would be willing to keep talking
  • Lighthizer says he does not want to speculate on timing of a potential deal
  • Lighthizer and Mnuchin say they have not talked to the vice premier in the last 24 hours
  • Lighthizer says you have to have specificity in the agreement to make it enforceable
  • Lighthizer says there will be an exclusion process for the tariffs to deal with companies' difficulties
  • Mnuchin says there were communications over the weekend that moved the agreement substantially backward
  • Mnuchin says we were in the process of planning a summit with Trump and Xi

Headlines via Reuters.

Risk lower on these. There had been recovery during the US day after big falls in Asia on Monday. The two officials confirming Trump's tweet though. Risk be on the back foot heading into Asia time.