The Dow Jones Industrial Average on Thursday shot up 400 points, or 1.6 percent, to 26,780 following an announcement that the U.S. and China would renew trade talks in October.
China announced Thursday that negotiations would pick up in Washington next month following mid-level discussions in September — a sign of life for the derailed discussions.
{mosads}Trump administration officials had said a deal was close earlier this year, but the trade war ramped up after they reached an impasse in May.
President Trump imposed new 15 percent tariffs on $112 billion of Chinese imports on Sunday and is on track to increase tariffs on $250 billion of imports come October. Another round of 15 percent tariffs is scheduled for mid-December.
China imposed its own tariffs on American goods, specifically targeting agriculture and other sectors intended to inflict pressure on Trump.
The trade war has undermined one of Trump’s central reelection messages: that he has been the steward of a strong economy. Already, the economy has shown signs of weakening, with growth rates expected to drop below 2 percent next year. There have also been concerns that a full-blown recession could be around the corner.
Analysts have warned that the trade war has added to costs, increased uncertainty and put off investments by business.
A trade deal could help set the stage for Trump’s reelection in 2020, bringing down trade barriers and installing a new sense of certainty. Trump has tried to pressure China, saying a deal would only get tougher if he’s reelected.
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