By Lucinda Shen
March 28, 2019

The first concrete signs of a breakthrough in trade war talks between China and the U.S. came in December. Following the G20 meeting President Donald Trump ebulliently announced that negotiations to resolve the year-long trade war had resulted in a truce. Then a day later, he exclaimed: “but… remember, I am Tariff Man.” Since then, some wary traders haven’t been able to take the commander-in-chief completely for his word. Instead, they’ve waited until the Chinese government’s mouthpiece, Xinhua News Agency, confirms the news, says FTN Financial Chief Economist Chris Low.

The reason: Investors simply don’t know who to believe with mixed messages coming out of the U.S. capital. The pattern has only continued to repeat itself. In late February, Trump again said a deal was “very very close”—only to be undercut by U.S. Trade Representative Robert Lighthizer saying he wasn’t “foolish enough” to think there would only be one negotiation. A day later, Trump Economic Advisor Larry Kudlow said “fantastic” progress had been made on the topic.

With the morass of competing insights, some investors have instead turned to Xinhua—the Chinese government mouthpiece whose credibility is questioned in the west for frequently sprouting party propaganda.

Nicholas Sargen, Chief Economist at Fort Washington Investment Advisors, says he hasn’t seen such confusion about the U.S. government’s messaging in his 40 years in the industry.

Certainly, investors are generally expecting the trade war to resolve—as it’s widely accepted that protracted negotiations between the world’s two largest economies will only make for two losers. Research from Renaissance Macro Research reports that the S&P 500 could be roughly 11% higher, but has been depressed by trade war tensions and uncertainty.

But even with a bilateral agreement, the president’s mercurial and often spur-of-the-moment messages will make it hard to win back investors’ trust.

“I think we are going to get a truce, but don’t think the truce is going to be the end. Next year, the White House could change its mind,” said Sargen. “In past administrations, it’s been one unified message—In this administration, it’s a thousand voices.”

A version of this article appears in the April 2019 issue of Fortune with the headline “When China Speaks, the Markets Listen.”

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