President Trump met with the Chinese Vice Premier and top trade negotiators last Friday, revealing that a “Phase One” deal had been agreed between the two nations.

According to the White House, China will purchase $50 billion of U.S. farm products. In exchange, Trump agreed to hold increased tariffs on $250 billion of Chinese goods that were due to be implemented yesterday.

Despite the administration promoting this as a step forward in negotiations, it now appears that China wants more talks before it commits to anything on paper.

Is China Pushing Back Yet Again?

President Trump called the $50 billion farm products purchasing plan a “tremendous” increase. He also said that China had agreed to address key concerns like financial services and currency manipulation, technology transfers between U.S. and Chinese companies, and intellectual property protections.

The deal was agreed in principle, but nothing was signed. Now China has said that it wants more talks before it commits.

Reports have emerged that China wants Trump to cancel another set of tariffs planned for December. Pending negotiations, China may be willing to hold a signing meeting at next month’s Asia-Pacific Economic Cooperation (APEC) meeting, which will be held in Chile.

While investors won’t necessarily see this as a setback, it is still a worrying sign. Trump and other officials have accused China of backpedaling on agreements in the past. China has reportedly changed the terms of a larger deal on multiple occasions.

While it’s reassuring to hear the President say that China will address key concerns surrounding foreign business and intellectual property, there have been no details indicating how this will happen.

Democratic Bills Could Derail Trade Talks

Trump may be willing to hold more tariffs if China comes through on its end of the bargain, however, a new problem has emerged in the House of Representatives.

The House, which is controlled by a Democratic majority, passed three new bills this week that could interfere with trade talks. The bills were specifically targeted at supporting ongoing protests in Hong Kong. The first is a motion supporting the right of protest. The second is a proposal allowing for the U.S. to monitor China’s influence over Hong Kong. The third seeks to prevent the use of U.S. manufactured weapons against protestors.

While largely symbolic in nature, the bills have angered the Chinese government, which said on Wednesday that “China will definitely take strong countermeasures in response to the wrong decisions by the U.S. side to defend its sovereignty, security, and development interests.”

It’s unknown whether the bills will gain traction in the Senate, but they clearly won’t help ongoing negotiations. As always, investors should follow trade developments closely, as they can directly impact the markets.