Stocks soared to record-breaking heights on Thursday after China said it and the US have agreed to roll back tariffs in phases, stoking hopes that an end to President Trump’s trade battles may be in sight.
The White House, however, failed to issue a public statement on China’s announcement, and reports suggested US officials were divided on whether to give ground on hotly contested tariffs.
Chinese Ministry spokesman Gao Feng said early Thursday that both sides had agreed to simultaneously cancel some tariffs on each other’s goods, and were closer to a so-called “phase one” trade agreement, according to China’s state broadcaster.
Gao stressed that one important condition for a limited trade agreement was that the US and China must remove the same amount of charges at the same time, according to the report.
“Based on the content of that agreement, tariffs already increased should be canceled at the same time and by the same rate,” Gao said at a news briefing.
The news sent the Dow Jones industrial average soaring as much as 282.07 points to hit a fresh, all-time high of 27,774.67. The Dow closed at 27,674.80, up 182.24 points, or 0.7 percent. The S&P and Nasdaq also hit new records, with each closing 0.3 percent higher.
While some US officials privately confirmed that mutual tariff reductions had been agreed to, others suggested that China’s announcement was a ploy to gain leverage in talks.
The idea of rolling back any tariffs is getting fierce opposition at the White House and from outside advisors, sources told Reuters on Thursday. The idea of a tariff rollback was not part of the original October “handshake” deal between Chinese Vice Premier Liu He and President Trump, the news service reported.
The two governments have raised tariffs on billions of dollars of each other’s goods in the fight over China’s trade surplus and technology ambitions. Casualties could include China-made TVs, cell phones, toys and shoes.
That weighs on trade and threatens to depress global economic growth that already shows signs of slowing.
President Trump, who agreed to postpone a planned tariff hike while lower-level officials hammered out details, said China had agreed to buy up to $50 billion of American farm goods.
The Oct. 12 agreement helped ease market jitters, but the two sides have yet to announce progress on major disagreements over technology and other irritants following 13 rounds of talks.
Trump and President Xi Jinping were due to meet at this month’s gathering of Asia-Pacific leaders in Chile but that event was canceled because of protests there.
Commerce Secretary Wilbur Ross this week said any “Phase 1” agreement would be general and cover trade in specific areas such as soybeans and liquefied natural gas. More complex issues would be tackled in later negotiations, he said.
With Post wires