China said it hopes “to create necessary conditions” to return to trade negotiations with the U.S., according to Reuters. China’s commerce ministry spokesman, Gao Feng also said the country is focused on removing new tariffs, rather than retaliation in a tit-for-tat trade war between the two economic powers.
“The most important thing at the moment is to create necessary conditions for both sides to continue negotiations,” Gao said on Thursday, Reuters reported.
Investors were cheered by the message, with the Dow rising 297 points, or more than 1%, to 26,333, as U.S. markets opened for trading and the S&P 500 and Nasdaq also climbing.
U.S. businesses and investors have been unsettled by the escalating trade war, which heated up last week when President Donald Trump hiked tariffs last week after China raised duties on $75 billion in U.S. goods.
On Wednesday, a coalition of more than 150 business group representing a wide swath of industries urged Mr. Trump to postpone U.S. tariffs on Chinese imports scheduled to take effect later this year until at least 2020, warning that the levies will damage the economy.
“Unfortunately, the delayed trade negotiations and increased tariff threats between the United States and China have led businesses to hold back on their capital expenditures,” said John Lynch, chief investment strategist for LPL Financial, in a research note. “After growing by approximately 7% in the first half of 2018, business investment has grown by only an average of 3.8% over the past year.
Gao on Thursday hinted that China isn’t focused on another round of tariffs. “China has ample means for retaliation, but thinks the question that should be discussed now is about removing the new tariffs to prevent escalation of the trade war,” he said, according to Bloomberg.
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