Stocks slide after Trump accuses China of violating Geneva trade agreement

President Donald Trump sent stock futures diving early Friday after he accused China of breaking a handshake pact the two countries made in Geneva earlier this month that had helped ratchet down a trade standoff.

In a post on Truth Social just after 8 a.m. ET, Trump wrote China “HAS TOTALLY VIOLATED ITS AGREEMENT WITH US” and signaled a tough response lay ahead.

“So much for being Mr. NICE GUY!” the president said.

All three major stock indexes opened Friday morning trading about 0.4% lower.

The “trade win” that the White House announced May 12 was expected to lead to China removing retaliatory tariffs and a suspension of “nontariff countermeasures taken against the United States.” Both sides agreed to lower tariffs on each other by 115% for 90 days.

U.S. Trade Representative Jamieson Greer, speaking on CNBC on Friday morning as Trump posted his message, said “this has been something that we’ve been discussing” since meeting with China in Switzerland. “The Chinese are slow rolling their compliance, which is completely unacceptable,” Greer said.

“You make every effort to be diplomatic and professional and to do things behind closed doors. But at some point, the impact on on the U.S. economy, or the trade relationship, becomes such that it’s hard to withhold that anymore,” he continued.

On Thursday, Treasury Secretary Scott Bessent said trade talks with China were “a bit stalled.” Bessent said he believed there would be more talks in the coming weeks but “given the magnitude of the talks,” Trump and Chinese President Xi Jinping would likely need to “weigh in with each other” first.

The matter hit a further snag Thursday after an appeals court temporarily reinstated a set of tariffs that a federal trade court had voided just hours earlier, casting fresh doubt on the path forward for Trump’s sweeping import taxes. The case is expected to make its way to the Supreme Court.

There has been almost no resolution in the market fluctuations that Trump’s trade war has set off. The week’s back-and-forth court opinions erased most of the stock gains from the first decision. Yet before Trump’s Friday post, stocks were poised for a weekly gain.

Since Trump took office, the S&P 500 has fallen approximately 2% — a modest decline that masks substantial weekly and even daily swings.

A Friday report showed consumer spending slowed from a 0.7% rate in March to 0.2% in April — adding to signs that Trump’s tariffs may be leading to an economic slowdown.

The data are “clear evidence that consumers are battening down the hatches,” Fitch Ratings analysts said in a note to clients, adding that Friday’s release from the Bureau of Economic Analysis also showed the highest savings rate since May 2024.

While the release also saw a favorable April inflation reading, the Fitch analysts said the Federal Reserve is “likely to interpret it as the calm before the storm” and continue to move cautiously on interest rates.