According to Reuters, government officials, diplomats and investors in Beijing have "lowered expectations for progress" from the upcoming trade talks with the US this weekend, after Washington "damaged" its "goodwill" by blacklisting more than two dozen Chinese firms.
Earlier in the day, high expectations about the outcome of the trade talks pushed US stock indices upward, with Apple and other tech companies leading the charge in market gains. However, the news immediately sent markets downward again, just minutes before the closing bell at the New York Stock Exchange. The Dow Jones Industrial Average ended the day with a 181.97-point gain.
US President Donald Trump reacted to the lowered expectations during an executive order signing, telling the media that Chinese officials "feel like I'm driving a tough bargain."
On Tuesday, the US Commerce Department added 28 Chinese security companies and agencies "determined by the US Government to be acting contrary to the foreign policy interests of the United States" to a trade blacklist. The entities are reportedly connected to repressive measures by Beijing in its eastern Xinjiang Province. The US State Department also added visa restrictions against Chinese officials over the issue.
Companies on the Bureau of Industry and Security's (BIS) Entity List can only be traded with by US firms or agencies if they acquire specific licenses to do so, Sputnik reported. Earlier this year, 70 Chinese tech firms, including Huawei and ZTE, were added to the Entity List.
Another set of US tariffs against Chinese imports looms on the horizon as well, casting a shadow over the trade talks. Last month, US President Donald Trump postponed the imposition of an additional $250 billion in trade penalties by two weeks, until October 15.