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“At present there are absolutely no negotiations on the economy and trade between China and the U.S.,” said Ministry of Commerce Spokesperson He Yadong.
U.S. President Donald Trump and Treasury Secretary Scott Bessent this week indicated that there might be an easing in tensions with China.
“If the U.S. really wants to resolve the problem … it should cancel all the unilateral measures on China,” He said.
Steel piled up at Guoyuan Port in Chongqing, China, on April 20, 2025.
Cfoto | Future Publishing | Getty Images
BEIJING — China on Thursday said that there were no ongoing discussions with the U.S. on tariffs, despite indications from the White House this week that there would be some easing in tensions with Beijing.
“At present there are absolutely no negotiations on the economy and trade between China and the U.S.,” Ministry of Commerce Spokesperson He Yadong told reporters in Mandarin, translated by CNBC. He added that “all sayings” regarding progress on bilateral talks should be dismissed.
“If the U.S. really wants to resolve the problem … it should cancel all the unilateral measures on China,” He said.
U.S. President Donald Trump and Treasury Secretary Scott Bessent this week indicated that there might be an easing in tensions with China. The White House earlier this month added 145% tariffs on Chinese goods, to which Beijing responded with duties of its own and increased restrictions on critical minerals exports to the U.S.
The commerce ministry’s comments echoed those of Chinese Foreign Ministry Spokesperson Guo Jiakun, who said on Thursday afternoon that there were no ongoing talks, according to state media.
Both spokespersons held to the official line that China would be willing to talk to the U.S. subject to Beijing being treated as an equal.
“China definitely wants to see the trade war deescalate, as it hurts both economies,” said Yue Su principal economist, China, at The Economist Intelligence Institute. “However, due to the inconsistency of Trump’s policies and the lack of clarity around what he actually wants, China’s strategy has shifted from focusing on ‘what you need’ to ‘what I need.’ Their request for the U.S. to cancel ‘unilateral’ tariffs reflects that shift.”
China earlier this week threatened countermeasures against countries that might make deals with the U.S. at the expense of Beijing’s interests.
“We also need to recognize that this is a ‘whatever it takes’ moment for China in terms of U.S.-China relations,” Su said. “I wouldn’t be surprised if China adopts a more hawkish stance if the U.S. continues to escalate tensions.”
Several Wall Street banks have cut their China GDP outlook in the last few weeks in light of the tariffs and escalating tensions with the U.S.
The Commerce Ministry on Thursday emphasized government and business efforts to help companies sell goods meant for exports to the Chinese market instead.
“From China’s perspective, any meaningful negotiations will likely require the US to reduce tariffs to the previous 20% or even lower level,” said Jianwei Xu, senior economist for Greater China, at Natixis.
“But for the Trump administration, however, reducing tariffs too far could raise uncomfortable questions: What was the point of the confrontation if we end up back where we started?”
The U.S. is China’s largest trading partner on a single-country basis. But in the last several years, Southeast Asia has surpassed the European Union to become China’s largest trading partner on a regional basis.
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A key force at the center of the stock market’s massive two-day rally is the frantic behavior of short sellers covering their losses.
Short covering was on display Tuesday and Wednesday as stocks shot up on signs of easing tensions on trade even though no concrete deals have been reached yet.
Treasury Secretary Scott Bessent said Wednesday “there is an opportunity for a big deal here” on trade issues between the U.S. and China.
Traders work on the floor at the New York Stock Exchange on April 22, 2025.
Brendan McDermid | Reuters
A key force at the center of the stock market’s massive two-day rally is the frantic behavior of short sellers covering their losses.
Hedge fund short sellers recently added more bearish wagers in both single stocks and securities tied to macro developments after the whipsaw early April triggered by President Donald Trump’s tariff rollout and abrupt 90-day pause, according to Goldman Sachs’ prime brokerage data.
The increased short positions in the market created an environment prone to dramatic upswings due to this artificial buying force. A short seller borrows an asset and quickly sells it. When the security decreases in price, they buy it back more cheaply to profit from the difference.
It can backfire when the security suddenly rallies and short sellers are forced to buy back their borrowed stocks rapidly to limit their losses, a Wall Street phenomenon known as a short squeeze.
If the market appeared to be rallying on no real tangible news Tuesday other than some walking back of comments on China and the Federal Reserve by Trump, credit this phenomenon.
“Squeeze risk is real today,” John Flood, a managing director at Goldman Sachs, said in an early note to clients Wednesday.
Flood echoed the sentiment of many traders who have said the market appeared coiled for a relief rally because so many hedge funds were caught on the wrong side of this bet.
Stock chart icon
Short covering was on display Tuesday and Wednesday as stocks shot up on signs of easing tensions on trade even though no concrete deals have been reached yet. Treasury Secretary Scott Bessent said Wednesday “there is an opportunity for a big deal here” on trade issues between the U.S. and China.
The 30-stock Dow Jones Industrial Average surged another 1,100 points Wednesday at its highs following a 1,000-point gain to end a four-day losing streak. The S&P 500 is up 3.5% week to date after back-to-back winning sessions.
Trump’s quick reversal on Federal Reserve Chair Jerome Powell also fueled the positive sentiment. Trump said he has “no intention” of firing Powell, after saying the central bank chief’s “termination cannot come fast enough” just a few days ago.
But the rally was quickly fading, with the Dow up just 500 points at midday Wednesday. The fading short squeeze boost evident at the open could be a reason for the pullback off the highs.
Also, Goldman’s Flood said hedge funds have not gone from short-covering to outright buying on the long side, a sign that the rally doesn’t have high conviction behind it.
“I am closely monitoring to see if HF covers in macro and singles start to evolve into long buys,” Flood said. “Also want to see longer duration investors step in and buy names they view as fair value. We have not seen any of this type of action, yet.”
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