China Responds to Trump's Softening Tone on Trade

China said "our doors are wide open" for talks after President Donald Trump softened his tone on the unfolding trade war between the world's two largest economies.

Guo Jiakun, China's foreign ministry spokesperson, made the comments at a press briefing on Wednesday, according to Chinese state media.

Why it Matters

The trade war has hammered global markets and raised fears of recession. The International Monetary Fund (IMF) shaved half a percent off its growth forecast for 2025, which is now 2.8 percent, mostly because of the tariffs.

Any signs of progress towards resolving the U.S.-China trade war will relieve investors and give hope to businesses who rely on the smooth trade relations, which have been upended by Trump as he tries to reshape the global order.

What to Know

The day before Guo's remarks, Trump had expressed optimism about making a deal with China and said he had a good relationship with the Chinese president, Xi Jinping.

He also said he expected "very high" tariffs on Chinese imports will "come down substantially, but it won't be zero."

"I think we're going to live together very happily and ideally work together, so I think it's going to work out very well," Trump told reporters at the White House.

Separately, U.S. Treasury Secretary Scott Bessent told private investors that the trade war with China was unsustainable and he expected a de-escalation soon, according to The Associated Press.

Trump has excluded China from a pause on his "reciprocal" tariffs that was extended to other trading partners to give time to negotiate.

He blamed China's retaliatory actions for its exclusion and has hiked his tariffs on Chinese imports to at least 145 percent. That includes a 125 percent reciprocal tariff and a 20 percent tariff related to its role in the fentanyl trade.

Additional pre-existing Section 301 tariffs take the total potential rate for some Chinese goods as high as 245 percent.

But new signs of a positive shift in tone were read favorably by the markets, which had seen sharp losses over concerns the broader trade war would drag the U.S. and other economies into recession. Global shares mostly rose Wednesday morning.

France's CAC 40 jumped 2.1 percent in early trading, while Germany's DAX rose 2.5 percent and Britain's FTSE 100 gained 1.6 percent.

In Asia, Japan's benchmark Nikkei 225 gained 1.9 percent. South Korea's Kospi gained 1.6 percent and Hong Kong's Hang Seng added 2.4 percent.

And there were signs of further gains in U.S. shares to come, with Dow futures up 1.5 percent, while S&P 500 futures rose 2 percent.

What People Are Saying

China's Guo said, per China's state-run Global Times newspaper: "We don't want a trade war, but we are not afraid of it. If the U.S. truly wants to resolve issues through dialogue and negotiation, it should stop threatening and blackmailing, and engage in dialogue with China based on equality, mutual respect, and mutual benefit."

Tim Waterer, chief market analyst at KCM Trade, told AP: "Of course, markets will continue to listen out for the latest White House rhetoric on tariffs and any hints of upcoming trade deals. As such, market direction will more likely than not continue to be dictated by Trump's latest whims regarding tariffs and trade."

What's Next

The Trump Administration is currently trying to negotiate deals with multiple trading partners, and updates on the progress of those is expected soon. China fears the U.S. will use these deals to squeeze it out of trade with certain partners.

Trump and Bessent have indicated a willingness to engage with China, acknowledging the current situation is unsustainable. China has also said it would talk. Markets will watch closely for more signs of progress on resolving the trade conflict.

This article includes reporting by The Associated Press.