China warns to keep 'champagne' on ice after 'phase one' trade deal

The United States and China still have some work to do before finalizing their “phase one” trade deal.

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Beijing wants to send Vice Premier Liu He, China's top trade negotiator, to Washington as soon as the end of October to finalize a deal that can be signed next month at the Asia-Pacific Economic Cooperation conference next month in Chile.

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“While the negotiations do appear to have produced a fundamental understanding on the key issues and the broader benefits of friendly relations, the Champagne should probably be kept on ice, at least until the two presidents put pen to paper,” wrote the state-owned China Daily.

Stocks futures are pointing to a modestly lower open following the report. Last week, the major averages rallied sharply in anticipation of a deal.

“The outline of the agreement is quite similar to what was reached in late 2018 after the first trade summit between Presidents Trump and Xi,” wrote a global markets research team at the Tokyo-based investment bank Nomura, adding that the deal does little to materially reduce "fundamental uncertainties regarding the US-China economic relationship."

The “phase one” agreement came days before customs data released Monday by Beijing showed Chinese exports to the U.S. fell 17.8 percent to $36.5 billion in September, evidence the trade war is taking a toll on the world’s second-largest economy. The U.S. is the biggest buyer of Chinese goods.

Trade negotiators from the U.S. and China on Friday agreed to a deal in principle that is expected to take three to five weeks to complete.

As part of the deal, China agreed to increase its purchases of U.S. agricultural products and Boeing aircraft, in addition to making reforms on intellectual property and financial services. The U.S. has agreed to not raise tariffs from 25 percent to 30 percent on Oct. 15. A decision has not yet been made on the tariff increase scheduled for Dec. 15.

Trump touted the agreement as a big win for U.S. industrial companies and farmers.

“There will be more tractors sold, they’re going to be bigger and better and more powerful and they’re going to be made by John Deere and Case [IH] and Caterpillar,” Trump said Friday during a rally in Lake Charles, Louisiana.

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On Sunday, he tweeted, “My deal with China is that they will IMMEDIATELY start buying very large quantities of our Agricultural Product, not wait until the deal is signed over the next 3 or 4 weeks."