BIARRITZ, France/BEIJING--U.S. President Donald Trump on Monday predicted a trade deal with China after positive gestures by Beijing, calming global markets that have been roiled by new tariffs from the world's two largest economies.
Trump said after a G7 summit of world leaders in Biarritz, France, that he believed China was sincere about wanting to reach a deal, citing what he described as increasing economic pressure on Beijing and job losses there.
Chinese Vice Premier Liu He, who has been leading the talks with Washington, said on Monday that China was willing to resolve the trade dispute through "calm" negotiations and opposed any increase in trade tensions. Trump cited Liu's comments as a positive sign, underscoring his seniority, and repeated his assertion that Chinese officials had contacted U.S. trade counterparts overnight and offered to resume negotiations, an assertion that China declined to confirm.
"I think they want to make a deal very badly. I think that was elevated last night. The vice chairman of China came out, he said he wants to see a deal made," Trump told a news conference with French President Emmanuel Macron. "The longer they wait, the harder it is to put back, if it can be put back at all. I don't think they have a choice."
The trade war between the world's two largest economies has damaged global growth and raised market fears the world economy will tip into recession. Macron said an agreement would help dispel uncertainty that has been weighing on global markets. He said Trump had told other G7 leaders that he wanted to strike a deal with China.
The upbeat tones soothed global markets, sending U.S. stocks higher and bolstering the U.S. dollar, which had fallen to a 2-1/2-year low against the Japanese yen earlier. The S&P 500 .SPX gained 31.27 points, or 1.10%, to close at 2,878.38, while the dollar index .DXY reversed course to trade higher, last rising 0.4%.
The Chinese yuan, which had fallen to an 11-year low in the onshore market and hit a record low in the offshore market, pared losses. In the offshore market, the Chinese yuan CNH= was last down 0.5% at 7.1684 per dollar.
Trump said he was more upbeat about the prospects for an agreement with China than in the recent past, and signalled that Washington could also reach a trade agreement with Brussels that averted car tariffs on car imports from Europe.
The U.S. leader also downplayed the prospect of new U.S. tariffs on autos imported from Japan, after a trade deal reached by the largest and third-largest economies on Sunday.
Asked whether his contradictory statements on trade matters had fuelled global market uncertainty, Trump appeared to defend the practice and said it had served his interests well. "Sorry," he said, flatly. "It's the way I negotiate. It's done well for me over the years, and it's doing even better for the country, I think."
Days after referring to President Xi Jinping as an enemy, for instance, Trump on Monday heaped praise on his Chinese counterpart in separate remarks, alternately calling him a "great leader" and a "brilliant man."
In Beijing, Foreign Ministry spokesman Geng Shuang said he had not heard that a phone call between the two sides had taken place. China's Commerce Ministry, which typically releases statements on trade calls, did not respond to a request for comment.
