By Reuters
July 20, 2017

The United States and China failed on Wednesday to agree on major new steps to reduce the U.S. trade deficit with China, casting doubt over President Donald Trump’s economic and security relations with Beijing.

The annual economic dialog session in Washington ended with canceled news conferences, no joint statement and no new announcements on U.S. market access to China.

The two sides had a “frank exchange” but failed to agree on most major bilateral trade and economic issues that were important to the United States, a senior U.S. official said on condition of anonymity because he was not authorized to speak publicly.

These included U.S. demands for access to China‘s financial services markets, reducing excess Chinese steel capacity, reductions in auto tariffs, cutting subsidies for state-owned enterprises, ending Chinese requirements for data localization and lifting ownership caps for foreign firms inChina, the official said.

“China acknowledged our shared objective to reduce the trade deficit which both sides will work cooperatively to achieve,” U.S. Treasury Secretary Steven Mnuchin and U.S. Commerce Secretary Wilbur Ross said in a brief statement, highlighting a rare point of consensus.

Far from Mar-A-Largo

The session had been billed as a follow-up to Trump’s first meeting with Chinese President Xi Jinping at his Mar-A-Lago, Florida, estate in April when Trump hailed Xi’s cooperation in curbing the threat from North Korea. Trump said that this would lead to better trade terms for China.

The two leaders launched a 100-day economic plan that has produced some industry-specific announcements, including the resumption of American beef sales in China and pledged to grant limited U.S. access to some financial services sectors.

But there have been no new initiatives since, and Trump has grown increasingly frustrated withChina‘s lack of pressure on North Korea. His administration has threatened new sanctions on small Chinese banks and other firms doing business with Pyongyang.

Ross and Mnuchin said the U.S. position on the China trade relationship would be guided by “the principles of balance, fairness, and reciprocity on matters of trade will continue to guide the American position so we can give American workers and businesses an opportunity to compete on a level playing field.”

China‘s delegation leader, Vice Premier Wang Yang, left the Treasury building without speaking to reporters, and the Chinese embassy in Washington declined to comment on the talks. Earlier, Wang had warned that confrontation between the two countries would be damaging.

Steel rally

Investors interpreted the negative signals from the talks and lack of new trade announcements as making it more likely that Trump would forge ahead with broad steel tariffs or quotas based on a national security review, sending steelmakers’ shares soaring.

Shares of United States Steel closed up 4.8%, while AK Steel rose 3.6% and Nucor rose 2.2%.

Trump, asked by a reporter at the White House after the stock market closed whether he would impose steel tariffs, said: “Could happen.”

Potential steel tariffs, which could be announced in the coming weeks, were expected to be a difficult topic in the U.S.-China talks. Ross has blamed massive Chinese excess capacity for a global steel glut that is hurting U.S. producers.

Even if the U.S. and Chinese governments fail to agree on more substantive trade terms, corporate chief executive officers from the two countries pledged to deepen their cooperation and joint investment efforts.

For more on U.S. trade with China, watch Fortune’s video:

Led by Blackstone Group (bx) CEO Stephen Schwarzman and Alibaba Group (baba) CEO Jack Ma, a group of 20 executives said they were committing to increase bilateral trade, including the export of U.S. agricultural goods, liquefied natural gas and consumer products to China.

“A stable, growing economic relationship between the United States and China is mutually beneficial to the people of our two countries and for the world,” Ma and Schwarzman said in a statement.

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