US stock futures rose on Monday after President Donald Trump hinted he would scale back his threat to impose 100% tariffs on Chinese imports. The announcement followed last week’s sharp market decline, which saw the S&P 500 and Nasdaq fall after Trump warned about canceling his October meeting with President Xi Jinping.
Trump posted on Truth Social: “Don’t worry about China, everything will be fine! President Xi went through a difficult time. We both want strong economies, not a depression. The United States intends to support China, not harm it.”
The announcement sparked a strong market reaction. In premarket trading, S&P 500 futures rose as much as 1.6%, while the Dow Jones and Nasdaq also rose. Bitcoin and other cryptocurrencies, which fell sharply last week, partially recovered, although Bitcoin remained below its recent peak of $125,000.
Last Friday, Trump had warned of canceling a planned meeting with Chinese President Xi Jinping and had proposed a 100% tariff on Chinese imports, following new Chinese restrictions on rare earth metals. These materials are crucial for American electronics, vehicles and defense equipment. The threats had led to the biggest daily losses for major US indices in months.
Despite the volatility, investors are betting that the tariff threats are largely for negotiation purposes, a strategy analysts jokingly call “TACO trading” (Trump Always Chickens Out).
Michael Brown, senior strategist at Pepperstone, noted that market confidence has returned as traders interpret weekend remarks by Trump and Vice President JD Vance as signs that the steep tariffs are unlikely to be fully implemented. Vance also urged China to act reasonably and emphasized that the United States has “more cards” in the negotiations.
Meanwhile, recent Chinese export data shows resilience in the global market. September shipments rose 8.3% compared to a year ago, their fastest growth in six months, despite falling exports to the United States. Analysts say this strengthens China’s negotiating position.
China also warned it would respond if the 100% tariffs go ahead. A spokesperson for the Chinese Ministry of Commerce stated: “Threats of high tariffs are not an appropriate way to handle trade relations. We do not want a trade war, but we are prepared.”
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