U.S. markets had a strong open Monday morning on President Trump's announcement that U.S. and Chinese officials are willing to continue talks in an effort to de-escalate mounting trade tensions.
Speaking from the G7 summit in Biarritz, France, Trump said that Chinese negotiators had called U.S. officials and requested a new round of talks. "We'll be getting back to the table. And I think they want to do something," he said. "This is a very positive development for the world."
China's Foreign Ministry spokesperson Geng Shuang, however, said at a press conference Monday that he was not aware of any calls, but that the trade feud should be solved "through dialogue and consultation."
Meanwhile, Chinese Vice Premier Liu He said at an economics conference in Chongqing that China favored "calm negotiations" to resolve trade tension. "We resolutely oppose the escalation of the trade war, which is not beneficial for the U.S. or China. It is also not beneficial to the world," Liu said, according to multiple reports citing government transcripts.
By midday, the Dow was up more than 250 points, while the S&P 500 and Nasdaq Composite were up more than one percent. Yet the news came too late for Asian markets, which had plummeted by close Monday local time.
The Hang Seng Index in Hong Kong and the Shanghai Composite Index ended the day down 1.91 percent and 1.17 percent respectively. The Nikkei in Tokyo closed down 2.17 percent and South Korea's Kospi Index fell 1.6 percent.
On Monday, Trump also repeatedly lauded Chinese President Xi Jinping as a "great leader" and a "brilliant man" — a far cry from the "enemy" characterization that Trump gave Xi last week.
The enduring trade dispute between the U.S. and China, which has both ebbed and surged in recent months, significantly escalated last week. China announced on Friday that it would hit $75 billion worth of U.S. goods with new retaliatory tariffs and proceed with a steep tariff levied on U.S. vehicles and car parts.
In response, Trump announced that the U.S. would hike its 25 percent tariff on $250 billion worth of Chinese imports to 30 percent, and increase the forthcoming 10 percent tariff on $300 billion worth of goods to 15 percent. Friday's culmination sent U.S. stocks into a nosedive and led to an outcry from industry against the escalation.
Trump added he was confident that Liu's remarks on calm negotiations were sincere and were not a bid to quell market woes. "I think they want to make a deal. I think they should make a deal, and I think if they don't make a deal it will be very bad for China," he said during a press conference with President Emmanuel Macron of France.
At a separate event, Treasury Secretary Steven Mnuchin said Liu's remarks were "very significant statements" and that the U.S. was communicating with the vice premier, who is China's chief negotiator, through intermediaries.
China, nonetheless, urged the U.S. on Monday not to "miscalculate the situation" and to cease its "erroneous ways."
"China firmly opposes and rejects such stark trade bullying and maximum pressuring tactics," Shuang said. "I would like to remind the U.S. once again that threats and intimidation will never work on China."
In response to a question on the trade uncertainty fueling market volatility, Trump said "Sorry, it's the way I negotiate ... and it has done very well for me over the years."
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