U.S. stocks surged Monday as fears eased about the possibility of an all-out trade war with China over competing tariff increases.

The closely watched Dow Jones Industrial Average of 30 key stocks jumped by more than 1.5 percentage point in New York in early-day trading and other indexes were also advancing sharply. Earlier, Asian stocks were mixed, while European indexes edged down for the day.

Global markets plummeted last week after U.S. President Donald Trump announced tariffs on $60 billion worth of Chinese imports in an effort to trim $100 billion off the $375 billion trade deficit the U.S. recorded last year with China. Beijing immediately vowed to retaliate with higher import duties on U.S. goods.

But there were signs Monday of easing of tensions between the world’s two biggest economies.

White House trade adviser Peter Navarro told CNBC that U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer are talking with Chinese officials about trade issues between the two countries. Mnuchin told Fox News he was “cautiously hopeful” that the U.S. would reach a deal to keep China from imposing tariffs on $50 billion worth of U.S. exports.

The Trump administration is asking China to lower tariffs on U.S. car exports and open its markets to U.S. financial service companies. Bloomberg News reported that Mnuchin called China’s Liu He to congratulate him on his appointment as China’s vice premier for economic policy and that the two officials discussed ways the two countries could mutually agree to close the wide trading gap between the two countries.

Chinese Foreign Ministry spokesperson Hua Chunying said China would be willing to meet with U.S. officials to work out the two countries’ trade issues, while China’s foreign ministry urged the U.S. to “stop economic intimidation” over tariffs.

While avoiding mention of the tariff dispute and last week’s sharp drop in stock prices, Trump boasted about the performance of the U.S. economy.

“The economy is looking really good,” he said in a Twitter comment. “It has been many years that we have seen these kind of numbers. The underlying strength of companies has perhaps never been better.”
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