The Dow Jones Industrial Average plunged 800 points, or 3.1 percent, by the close of trading. | Spencer Platt/Getty Images Finance & Tax Markets drop as doubts grow over Trump’s China deal

Doubts about President Donald Trump's temporary cease-fire in a trade war with China helped spark a plunge in stocks on Tuesday, as senior administration officials acknowledged it was too early to say if a longer-term deal could be reached.

“The market is trying to figure out is there going to be a real deal at the end of 90 days or not,“ Treasury Secretary Steven Mnuchin said Tuesday during an on-stage interview at the Wall Street Journal's CEO summit in Washington. "Now, whether we can get that to a real agreement, or at least make a lot of progress, over the 90-day period or not, time will tell.”


Markets initially rallied Monday on news that Trump and Chinese President Xi Jinping had agreed over the weekend in Buenos Aires to put the trade war on hold for the next 90 days, while the two sides try to reach a deal on U.S. concerns about Chinese intellectual property theft and forced technology transfers. But there has been confusion about just what China said it would do, as well as skepticism about how many reforms the nation can make in such a short period.

The Dow Jones Industrial Average plunged 800 points, or 3.1 percent, by the close of trading and the broader Standard & Poor’s 500 index fell nearly 3.25 percent for its biggest single-day drop in about two months. Worries about economic growth were also weighing on investors.

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Mnuchin tried to explain that the administration had “very specific commitments” by China and Xi himself. But various administration officials have been vague about what comes next, and even when the 90-day clock begins. (The White House clarified on Monday that it began on Dec. 1).

Earlier in the day, Commerce Secretary Wilbur Ross also said it was too early to tell if trade talks with China will be a success, despite “very good assurances” Trump had received from Xi.

Ross, who was not at the dinner in Argentina, said the two presidents only discussed details at "the 40,000-foot level" and that it was up to negotiators from both sides to fill in the pieces.

"When presidents get together, you’re at a very, very high level, very broad principles of understanding," Ross said in an interview on CNBC. "Now comes the hard part, which is translating that into a definitive agreement."

"Our hope is that in the 90 days we’ll pin down real ways to implement the broad principles that were discussed," Ross said. "If they ... live up to what was contained in the U.S. press statement after the two presidents had their big dinner, I think things will be very good. But it’s too early to tell how serious they are."

Markets will be closed Wednesday in observance of a day of mourning for the late President George H.W. Bush, so the administration may have some time to sharpen its message before nervous investors speculate about next steps in the trade war.

Although three months may seem like a short time to make progress on tough issues like intellectual property theft, forced technology transfers and reducing the U.S. trade deficit with China, the two countries have already been talking about those concerns for almost two years, Ross said.

The two sides have been discussing since May a list of 142 possible Chinese reforms, Ross said, "and the president got what he regarded as very good assurances from President Xi that a large portion of them would be addressed — and very, very quickly."

