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The almost yearlong trade standoff between the United States and China is nothing but "a little squabble," President Donald Trump said Tuesday morning, telling reporters at the White House, "You know what: We always win."
Wall Street responded positively to the president's comments, with the Dow Jones Industrial Average spiking to 330 points — a reversal of Monday's stock market plunge that saw all three major indices drop to their lowest levels of the year after China announced it would raise tariffs to 25 percent on $60 billion worth of American imported goods.
Trump's encouraging signals on trade helped the S&P 500 rally by 1.2 percent by midday Tuesday. The tech-heavy Nasdaq Composite climbed 1.4 percent, with Apple shares rising by 1.75 percent, having lost ground on Monday as investors weighed the impact of tariffs on the China-dominant tech giant.
Additionally, Trump doubled down on his pressure on the Federal Reserve on Tuesday, tweeting that the U.S. would "win" the trade war if the Federal Reserve were to cut rates, saying "China will be pumping money into their system and probably reducing interest rates, as always, in order to make up for the business they are, and will be, losing. If the Federal Reserve ever did a 'match,' it would be game over, we win! In any event, China wants a deal!"
In the meantime, China's official state media called for a "people's war" to fight for the country's "legitimate rights and interests." An editorial in the People's Daily newspaper on Tuesday said that "the trade war in the United States is the creation of one person and his administration," and that it is threatening "the entire country and all the people of China."
Trade talks between the two sides stalled last week after Beijing reportedly sent Washington a 150-page document that reneged on several previous concessions. That development fueled a surprise announcement from Trump, who said via tweet Sunday: "The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!"
That back and forth then led to Trump to raise tariffs on $200 billion of imported Chinese goods to 25 percent as of 12:01 a.m. Friday, and China's announcement Monday that it would be applying retaliatory tariffs as of June 1.
The notion of a protracted trade war between the world's top economies has given markets whiplash over the past few weeks as traders parse the bluster from both sides while weighing their own exposure. On Monday alone, more than $1 trillion in value was wiped off global markets.