After a sell-off on Friday, President Donald Trump declared, “Do not worry about China,” which caused US stock futures to rise on Sunday.
As of 6:32 p.m. ET, Dow futures were up 0.8%, S&P 500 futures were up 1.04%, and Nasdaq futures were up 1.34%.
Following Trump’s threat of an extra 100% tax on Chinese products, which would go into effect on November 1, stocks finished much lower on Friday. That would raise the duty on Chinese imports to 130%, which is not far from the 145% rate that was in place at the height of the trade war. It was the worst day for the S&P 500 and Nasdaq since April. It was the Dow’s worst day since May.
However, Trump seemed to imply that he would back out of his tariff threat on Sunday afternoon when he wrote on Truth Social that “it will all be great!”
On Air Force 1, Trump told reporters that he had “a wonderful connection” with Chinese President Xi Jinping and that he is “a great leader.”
His remarks diverged from those he made last week, when he said China was “getting extremely hostile” after Beijing’s escalation of export curbs on vital rare earth minerals used in consumer electronics on Thursday.
Beijing said Sunday that if Trump does not back down from his tariff threat, it would take retaliatory action against the US.
China’s trade ministry stated in an online statement on Sunday that “China’s position remains constant.” “We are not scared of a tariff war, but we do not want one.”
An further wave of reciprocal tariffs would reverse the gains achieved during months of discussions between US and Chinese officials. Like earlier tariff announcements when Trump has “chickened out,” it is unknown whether Trump would back down from his tariff threat before the deadline of November 1st, which would cause market trepidation.
In response to a question about the deadline of November 1st, Trump told reporters aboard Air Force One on Sunday, “Let us see what happens.”
While a spokesman for China’s commerce ministry claimed that “relevant nations and areas” were informed, US Trade Representative Jamieson Greer said during an interview on Fox News’ “The Sunday Briefing” that the US was “not alerted” in advance of China’s heightened export restrictions.