China stated that the two sides have maintained communication under the framework of a bilateral economic and trade consultation mechanism established earlier this year.
The Chinese government reportedly confirmed that Beijing and Washington held working-level talks on Monday, but urged the U.S. to show sincerity to resolve the differences. The comments came after U.S. President Donald Trump struck a conciliatory tone on Sunday and assuaged concerns about an escalation in the trade ties between the countries.
“The U.S. cannot engage in dialogue while intimidating and threatening to impose new restrictions. This is not the right way to deal with China,” the Chinese Ministry of Commerce said on Tuesday, according to the South China Morning Post. “China urges the US to immediately correct its wrong practices and show sincerity for dialogue.”
Trump warned last week that he would impose triple-digit tariffs on China after Beijing tightened its control on rare earths. These critical materials are essential in manufacturing a host of items, including electronics, automobiles, and semiconductors. The warning sent stocks into a tailspin on Friday.
The U.S. President, however, said on Sunday not to worry about China and that “It will all be fine!” but added that “President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I,” he added.
The market latched onto Trump’s comments, construing them to be positive, and rebounded on Monday. The SPDR S&P 500 ETF (SPY) and the Invesco QQQ Trust (QQQ), which track the S&P 500 and the Nasdaq 100 indices, rose 1.53% and 2.12%, respectively. The SPY and QQQ ETFs have gained 14% and 18%, respectively, for the year-to-date period. The iShares MSCI China ETF (MCHI), which climbed 3.11% on Monday, has rallied 36.5% this year.
On Stocktwits, retail sentiment toward SPY ETF remained ‘neutral’ by late Monday, while that of the QQQ ETF stayed ‘bearish.’ The message volume on both streams was at ‘high’ levels. The MCHI ETF drew ‘bullish’ sentiment from among retailers on the platform, an improvement from the ‘neutral’ mood seen the previous day. The message volume, however, remained ‘low.’
The SCMP report also noted that the MoC said that the two sides have maintained communication under the framework of a bilateral economic and trade consultation mechanism, which was established during trade negotiations earlier this year.
China’s most recent comments came after U.S. Trade Representative Jamieson Greer said in a TV interview on Sunday that the Chinese declined to have a phone call when the U.S. wanted clarification on Beijing’s expansion of rare earth export controls.
China refuted Greer’s comments, saying that China had communicated about the expanded controls. “China’s export controls do not equate to a ban on exports; applications that comply with regulations will be approved as always, working together to maintain the security and stability of the global industrial and supply chains,” the MoC stated. “In contrast, the U.S. has long generalized the concept of national security, abused export controls, and adopted discriminatory practices against China.”
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