Asia Stocks, US Futures Drop As US Says China Tariffs To Remain After Phase One Trade Deal

Markets across Asia dipped on Wednesday as the United States Treasury Secretary Steven T. Mnuchin said that the tariffs on Chinese imports will remain intact even after the phase one of the trade deal between the two countries is signed.

What Happened

The fact that the U.S. and China are finally set to sign the long-awaited phase one of their trade deal on Wednesday, ending an 18-month long trade war, provided a sigh of relief to the traders and markets in Asia, the European Union, and the U.S. surged earlier in the week.

This optimism seems to have been short-lived as Mnuchin gave a reality check on the scope of the deal late Tuesday.

"These tariffs will stay in place until there's a phase two. If the president gets a phase two quickly, he'll consider releasing tariffs as part of phase two," Mnuchin said, according to Reuters. "If not, there won't be any tariff relief. So it has nothing to do with the election or anything else. There's no secret agreements."

President Donald Trump earlier said that the second phase of the trade deal will not be signed until at least after the U.S. presidential elections in November.

The treasury department took China off the "currency manipulator" list on Monday.

The U.S. Trade Representative Robert Lighthizer said Tuesday that the translation of the agreement isn't yet completed, Reuters reported, but claimed that it will be ready and made public before the agreement is signed on Wednesday.

Lighthizer's comments add further air of uncertainty on the contents of the deal, the details of which remain murky just a few hours ahead of the signing.

Asia Stocks

China's Shanghai Composite traded 0.72% lower at 3,084.34. Shenzhen Component was down 0.76% at 1,804.36.

Hong Kong's Hang Seng Index traded 0.86% lower at 28,636.20.

Japan's Nikkei 225 was down 0.59% at 23,883.38, and TOPIX traded 0.58% lower.

Singapore's benchmark Straits Times Index traded 0.42% lower at 3256.70.

South Korea's KOSPI traded 0.48% lower at 2,228.15.

India's SENSEX and NIFTY 50 both traded 0.52% lower at press time. Indonesia's IDX Composite traded 0.38% lower at 6,301.20.

Australia's S&P/ASX 200 index defied the trend, trading 0.47% higher at 6.994.80. New Zealand's NZX 50 index too traded 0.44% higher.

U.S. Futures

NASDAQ 100 futures were down 0.22% at $9,042.75.

S&P 500 futures traded 0.17% lower at 3,282.25.

Dow Jones futures were down 0.22% at 28,871.