Major stock benchmarks on Wall Street climbed out of the red on Friday, after comments from President Donald Trump that he is optimistic about a trade deal with China.
“China wants to make a deal,” Trump said, but he added that what it had offered so far was not enough.
“They sent a list of things they are willing to do which is a large list and it is just not acceptable to me yet. But at some point, I think that we are doing extremely well with respect to China,” Trump said.
When asked about slapping tariffs on an additional US$267 billion worth of Chinese goods, the president replied: “We may not have to do that. China would like to make a deal.
“Hopefully, we will make a deal, and if we don’t, we are doing very well just the way it is right now,” Trump added.
The comments come amid what appears to be a battle for influence with the president among trade hawks and doves inside the White House.
In a sign that the hawks are losing sway, trade adviser Peter Navarro – who is squarely positioned inside the hawk camp – was publicly reprimanded by economic adviser Larry Kudlow this week for an inflammatory speech that called for taking a hard line against China.
US Trade Representative Robert Lighthizer, meanwhile, pushed back Thursday on reports that he told industry executives that a new tranche of tariffs was on hold. He was backed up by Commerce Secretary Wilbur Ross.
At each turn in recent weeks, and with each headline about the trade war, Trump has thrown out hints that he is optimistic that a deal is in the works. Coming amid a downturn in US stocks that has nearly erased gains for the year, Trump’s comments have led some to speculate that he is trying to influence market sentiment with the positive trade headlines.
One market that appears sold on the idea there is progress is the soybean market, as evidenced by this chart published by CNBC: