China imposed targeted tariffs on U.S. imports on Tuesday and put several companies, including Google, on notice for possible sanctions, in a measured response to the sweeping duties on Chinese imports imposed by President Donald Trump.

But word that Trump planned to speak with Chinese President Xi Jinping on Tuesday suggested to investors there was scope for China to receive a temporary reprieve as Trump granted to Mexico and Canada on Monday. Stocks and oil prices moved higher.

“Let’s see what happens with the call today,” Trump trade adviser Peter Navarro said at a Politico event. Earlier, White House spokeswoman Karoline Leavitt said a call between the heads of the world’s two largest economies “will happen very soon.” No other specifics about when the conversation would occur were immediately available.

Beijing’s limited reply to Trump’s imposition of a 10% tariff on all Chinese imports underscored the attempt by Chinese policymakers to engage Trump in talks to avert an outright trade war between the world’s two largest economies.

Capital Economics, a U.K.-based research firm, estimated that China’s additional tariffs would apply to about $20 billion of annual imports, compared with the $450 billion worth of Chinese goods subject to the Trump tariff that took effect at 12:01 a.m. ET on Tuesday (0501 GMT).

“The measures are fairly modest, at least relative to U.S. moves, and have been calibrated to send a message to the U.S.,” Julian Evans-Pritchard, the firm’s head of China Economics, said in a note.

Source:reuters.com