The plunge came hours before the Chinese Commerce Ministry said that it was confident it can reach a trade deal with the U.S as the countries continue to dispute tariffs placed on one another's goods.
China has made no direct mention of specific goods they will start to buy nor given any timeframe for when they may start.
In Buenos Aires, Trump agreed to delay the scheduled USA tariff increase for 90 days while the two sides negotiate over the administration's complaints related to how Beijing systematically steals trade secrets and forces the US and other foreign countries to hand over sensitive technology as the price of admission to the vast Chinese market.
There's still no official statement from Beijing that the deal reached Saturday to not raise tariffs is only for a 90-day period and is dependent on the outcome of talks.
The White House said China would agree to purchase a not yet agreed, but very substantial, amount of farm, energy, industrial, and other products from the United States. Export shipments dropped dramatically as China, one of the largest buyers of USA soybeans, sought alternative sources to avoid the high taxes.
Washington also expects China to promptly address structural issues including intellectual property theft and forced technology transfers, US officials have said.
The US trade deficit with China was $335 billion past year and many manufacturers rely on inputs from the world's number two economy, so eliminating the deficit would be an extraordinary goal.
Mnuchin said for the first time there was "a clear path" to reduce the United States trade deficit with China to zero.
After some confusion Monday about who would head the talks with China, Trump suggested Tuesday that U.S. Trade Representative Robert Lighthizer would take the lead, "working closely with" Treasury Secretary Steven Mnuchin, economic advisor Larry Kudlow, Commerce Secretary Wilbur Ross and trade advisor Peter Navarro.
The move, if realized, would bolster US auto manufacturers who were hit hard when China ramped up levies on USA -made cars in July as part of a broad package of retaliatory tariffs amid a sprawling trade war between Washington and Beijing.
"This is the first time that we have a commitment from them that this will be a real agreement", Mnuchin said Monday. Even though Beijing hasn't confirmed such a plan, shares in BMW (BMWYY) and Daimler (DDAIF), which export SUVs from the United States to China, soared more than 5% in Frankfurt on Monday morning.
"My relationship is very special, the relationship that I have with President Xi", he said as the two men were seated.
The president also returned to threatening China with higher tariffs.
They agreed to enhance "structural changes" over technology transfer, cyber intrusions and crime, agriculture, service and intellectual property protection, the White House said. "President Xi and I want this deal to happen, and it probably will".
According to a White House press release, for a 90-day period, the USA will maintain the 10 percent tariffs on its list of $200 billion in Chinese imports, postponing an anticipated January 1, 2019, increase in duty levels.
"China right now has major trade barriers-they're major tariffs-and also major non-tariff barriers, which are brutal".