Fears of a trade war on Wall Street appear to have faded.
The Dow Jones had its third-largest point gain in history Monday with a surge of 669 points, according to CNN Money. After a 2.8 percent increase, the Dow closed at 24,202, The Washington Post reported.
President Donald Trump announced in March a shocking plan to hit China with around $60 billion in trade penalties in response to alleged Chinese theft of American intellectual property. “China does not want a trade war with anyone,” the Chinese Embassy in the U.S. responded, “But China is not afraid of and will not recoil from a trade war. China is confident and capable of facing any challenge.”
“If a trade war were initiated by the U.S., China would fight to the end to defend its own legitimate interests with all necessary measures,” the embassy stated.
Further exacerbating fears of a trade war was China’s revelation that it has a plan to target $3 billion in U.S. goods in response to the steel and aluminum tariffs the president announced earlier this month.
Beijing continued to issue threats and warnings in the days that followed, but behind the shouting were quiet negotiations to avert a trade war that could harm both sides, according to The Wall Street Journal. U.S. officials reportedly sent a laundry list of demands to Beijing, specifically the reduction of Chinese tariffs on American vehicles, increased sales of American semiconductors to China, and greater access to China’s financial sector for U.S. companies.
The Financial Times reports that China is rushing to meet these demands.
“We’re not afraid of a trade war, but that’s not our objective,” Secretary of the Treasury Steven Mnuchin explained to Fox News Sunday, adding, “We are going to proceed with our tariffs. We’re also working on investment restrictions. But, we are simultaneously having negotiations with the Chinese to see if we can reach an agreement.”
Observers are reportedly convinced that the tariffs are a trading tactic, rather than a serious punitive measure. The president stressed in his announcement that he considers China a friend and revealed that negotiations are underway to reduce the bilateral trade deficit by $100 billion.
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