On Wednesday, the Trump administration said that it invited Chinese officials to restart trade talks, which has been welcomed by Beijing.
Many are likely waiting for third-quarter earnings for more details on the impact of trade, said David Joy, chief market strategist at Ameriprise Financial in Boston. "Our markets are surging, theirs are collapsing".
"There has been a lot of work that has been going on over the last eight months to try to persuade the president and the administration that tariffs are not going to work. If we meet, we meet?" "He will surely keep his hard line rhetoric but his administration may seek to make some deals behind the scene", he said.
"China has always held that an escalation of the trade conflict is not in anyone's interests".
Senior U.S. officials led by Treasury Secretary Steven Mnuchin recently sent an invitation to their Chinese counterparts, including Vice Premier Liu He, to hold another bilateral trade meeting. The White House has accused China of forcing US companies to partner with local firms and then stealing their intellectual property, among other grievances. A meeting among cabinet-level officials could ease market worries over the escalating tariff war that threatens to engulf all trade between the world's two largest economies and raise costs for companies and consumers.
But he cautioned: "I guarantee nothing". "There's some discussions and information that we've received that the Chinese government - the top of the Chinese government - wished to pursue talks", White House Economic Adviser Larry Kudlow was cited as saying by CNN on Wednesday.
The American Chambers of Commerce in China and in Shanghai appealed Thursday to both governments to avoid further damage by resuming negotiations aimed at settling the dispute over Beijing's technology policy.
A pending $200 billion list would extend further into consumer goods, and the threat of an additional $267 billion would basically cover every Chinese export to the United States.
President Donald Trump is urging his administration to move ahead with slapping tariffs on $200 billion of Chinese goods, according to a person familiar with the plans.
The current world trade system is not ideal and China supports reforms to it, including to the World Trade Organization, to make it fairer and more effective, Beijing's top diplomat said.
The invitation was first reported by the Wall Street Journal. It is part of a larger initiative by American businesses that hope President Trump will back down from hundreds of billions of tariffs he will place on imports, particularly from China.
Already, a six-day public hearing on tariffs held in late August saw representatives from a broad cross-section of United States businesses and industrial groups voicing their strong opposition against additional duties on Chinese imports, a move that they said would harm American consumers, workers and companies.
Hundreds of members of lobby groups have traveled to Washington to meet with lawmakers. He has also ramped up attacks on China, threatening auto import levies and pushing for a more pro-American North American Free Trade Agreement, even at the risk of killing the three-country pact.
"We don't think China has much more to offer than they already have, and the USA doesn't seem like it's inclined to accept what is now on the table", Polk told AFP.
"Washington's overall attitude is still tough, but they do not reject a "talk and fight" strategy". Stocks were higher in Taiwan and Southeast Asia.