In the latest episode of the ongoing trade war between the world’s two largest economies, China signaled it won’t retaliate against U.S. President Donald Trump’s latest salvo of tariffs, prompting stock market futures to shoot up as traders live and die on every word from the two parties.
Gao Feng, a spokesman for Beijing’s Ministry of Commerce said the Chinese and U.S. trade delegations have engaged in “effective” communications of late.
“We firmly reject an escalation of the trade war and are willing to negotiate and collaborate in order to solve this problem with a calm attitude,” Gao said, according to a CNBC translation of comments he made Thursday.
Trump said Monday that China had called his administration twice over the weekend to discus trade, though, delegates from China said they were unaware of any phone calls made.
“China has plenty of means for counter measures, but under current situation, the question that should be discussed right now is about removing the U.S.′s new tariffs on $550 billion Chinese goods to prevent escalation of the trade war,” Gao said.
The comments came after Trump announced Friday he was raising tariffs on $250 billion worth of Chinese imports from 25% to 30%, and increasing tariffs on the remaining $300 billion worth of Chinese imports from 10% to 15%. Trump’s latest tariff hike was direct retaliation against China’s earlier announcement it was slapping tariffs on $75 billion worth of U.S. imports.
Gao said China isn’t interested in further retaliation and would rather negotiate. We reported here on Money and Markets that China is content to play the long game and wait Trump out before striking a new trade deal, be it one more year or five more years.
“At present, there have been quite a lot of all kinds of sayings. In the area of economics and trade, we will clarify the facts and let everyone understand the truth,” Gao said.
The two sides are still scheduled to meet in September to negotiate further. In the meantime, Wall Street will seemingly hang on every word from the two sides.
Shortly after 9 a.m. EDT Thursday, the Dow Jones Industrial Average futures were up 252 points, or 1%. S&P 500 futures were up 0.9% and Nasdaq futures were up 1.1%.