Stocks were trading lower in pre-market Friday on news that President Trump has asked US trade officials "to consider" an additional $100 billion in tariffs against China imports, on top of the $50 billion previously announced.
Xi said China would raise the foreign ownership limit in the automobile sector "as soon as possible" and push previously announced measures to open the financial sector.
Pledging a "new phase of opening up", Xi told an economic forum on the southern island of Hainan that Beijing "does not seek a trade surplus" and hopes to increase imports.
China said on Monday it opposed the United States selling weapons to Taiwan, after the Trump administration approved the marketing licence required for USA manufacturers to sell technology to Taiwan that would allow for building submarines.
THE QUOTE: "Market nerves over trade tensions have seemingly calmed down, given that Trump has sounded optimistic on the prospects of a trade deal with China, notwithstanding Chinese protestations", said Chang Wei Liang, analyst at Mizuho Bank.
Those factors also left the speech falling short of its billing by Chinese officials, who had said Mr. Xi would offer up important policy changes in suitable commemoration of the launch of China's market-oriented reforms 40 years ago by former leader Deng Xiaoping.
Trump also said the U.S. is close to negotiating an update to the North American Free Trade Agreement.
The U.S. imported 58,000 passenger cars from China worth $1.5 billion previous year, according to the International Trade Administration, a federal agency within the Department of Commerce.
According to BlackRock: "Recent U.S. negotiating tactics have followed a consistent pattern: headline announcements spooking markets, followed by compromises and narrow implementation".
As of Friday, a representative from China's Ministry of Commerce and Trump's chief economic advisor Larry Kudlow, a former CNBC special contributor, said the two countries were not engaged in formal discussions on trade.
Fortunately, we could still avoid this needless and counterproductive trade war.
The businessman-turned-world leader today lashed out at tariffs placed on American cars sold in China, saying the current system levies a 2.5 per cent tariff on every Chinese vehicle imported to the us, while placing a 25 per cent duty on cars going the other way. Trump said in his tweet.
Amid widespread concern, and calls for restraint from USA businesses and farm states most vulnerable to Chinese retaliation, Trump said Friday the outcome would be worth the short-term risk.
Chinese officials deny foreign companies are compelled to hand over technology, but business groups say joint venture and licensing rules make that unavoidable.
Trump's hard line on China stems from the president's belief that current trade agreements put the Chinese at an unfair advantage.
"Bottom, line, this is part of a broader U.S". That's why whenever the USA initiates and/or China reacts on trade wars, not only the U.S. equity markets but also the global oil prices correct quite significantly.
However it added a full-blown trade war "would have a more pronounced effect".
Gao's comments came shortly after Trump defended his proposed tariffs, saying the move might cause "a little pain" but the United States would be better off in the long run.