China indicated it wouldn’t immediately retaliate against the latest US tariff increase announced by US President Donald Trump last week, emphasising the need to discuss ways to deescalate the trade war between the world’s two largest economies.
“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,” Ministry of Commerce spokesman Gao Feng said on Thursday. “China is lodging solemn representations with the US on the matter.”
When asked if that meant China wouldn’t retaliate at all for the latest escalation by the US, Gao didn’t elaborate but repeated the same comments. China has hit back against each previous tariff increase by the US, so not responding in kind this time may signal a change in strategy.
Stocks across Asia pared losses and European stocks turned higher with US equity futures as investors interpreted the comments as an olive branch from Beijing aimed at getting talks back on track. Gao said that both sides are discussing the previously announced trip in September by Chinese negotiators to Washington.