Businesspeople have appealed for a quick settlement after Beijing on Friday announced a $3billion list of US goods targeted for possible retaliation for President Donald Trump's tariff hike on steel and aluminum imports.
The United States has violated global trade rules with an inquiry into intellectual property and China is ready to defend its interests, Vice Premier Liu He told U.S. Treasury Secretary Steven Mnuchin, state media said on Saturday.
China's Ministry of Commerce (MOC) said Monday that it hoped the European Union would be cautious with the use of restrictive trade measures after the EU announced probe into imported steel products.
White House trade adviser Peter Navarro confirmed that President Donald Trump asked Mnuchin and Lighthizer to try to resolve trade differences with China. "China's retaliatory response to USA tariffs are just the latest chapter in a long and sad story where USA apple growers get hurt in a fight we didn't start and in which we have no interest. It's been very expensive" for the US, he added.
WALL STREET: The U.S. market rebounded from its worst week in two years.
China and the United States have launched secret talks to improve USA access to the Chinese markets, following the Washington's threat to use punitive duties to tackle trade imbalances.
Trump says he is "considering" veto of $1.3 trillion budget
The surprise threat also threatened to undermine future efforts by White House staff tasked with negotiating on Trump's behalf. But Trump praised the bill's provisions to increase military spending and said he had "no choice but to fund our military".
"It's not clear what the Trump administration's bottom line is", said Mr Scott Kennedy, the head of China studies at the Center for Strategic and International Studies in Washington.
China is considering buying more semiconductors from US firms as part of behind-the-scenes negotiations to reduce the USA trade deficit with China and avert a trade war, according to reports. The greenback's decline would make USA exports cheaper to foreign buyers.
China and Hong Kong stocks rose on Tuesday morning, as trade war fears eased on reports of behind-the-scenes talks between the United States and China.
On the bright side, struggling trade relations between the USA and China could pave the way for smoother NAFTA negotiations.
A spokeswoman said Severstal strongly believed the tariffs violated worldwide regulations and US law, and the national security claim was unfounded.
For now, it remains unclear when or if USA tariffs on Chinese imports will come into effect. Futures for the S&P 500 jumped more than 1 percent, the most in more than two weeks, while contracts for the Nasdaq were set for the first gain in four days.
"The bottom line is that China wants to threaten USA soybeans, but knows it isn't in position to actually cut that supply tie", Newsom said.
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