China said it is assessing the possibility of trade talks with the U.S., the first sign since Donald Trump hiked tariffs last month that negotiations could begin between the two sides.
China’s Commerce Ministry said in a Friday statement that it had noted senior U.S. officials repeatedly expressing their willingness to talk to Beijing about tariffs, and urged officials in Washington to show “sincerity” towards China.
“The U.S. has recently sent messages to China through relevant parties, hoping to start talks with China,” the ministry added. “China is currently evaluating this.”
Futures on the S&P 500 Index erased early losses in Asia while a gauge of regional equities also turned positive after the statement. The offshore yuan edged stronger, while the Australian dollar, a China proxy, also extended gains.
The statement signaled the stalemate between the world’s two largest economies could shift, after Trump hiked U.S. tariffs to the highest level in a century and Beijing retaliated in kind.
Trump has repeatedly said President Xi Jinping needs to contact him in order to begin tariff talks. Earlier this week, Treasury Secretary Scott Bessent said it’s up to Beijing to take the first step to de-escalate the dispute.
“The high level of reciprocal tariffs on China is not sustainable, so the market expects the US and China to start negotiating at some point,” said Woei Chen Ho, an economist at United Overseas Bank. “The beginning of negotiations will likely drive market volatility again because it is not expected to be plain sailing.”
A surprise reshuffle made public by Trump on Thursday may complicate bilateral relations by expanding the portfolio of Secretary of State Marco Rubio, the first person in his post to be sanctioned by Beijing. The U.S. president announced Rubio will serve as interim national security adviser while keeping his job as secretary of state. Michael Waltz, his current national security adviser, is set to be nominated to be the next U.S. ambassador to the United Nations.
The dual role created for Rubio will amplify his voice on issues of key concern to Beijing including Taiwan, a self-ruled island democracy that China claims as its territory. The top U.S. diplomat has previously pledged to address Beijing’s “destabilizing actions” in the South China Sea.
Speaking in an interview with Fox News’ Sean Hannity broadcast on Thursday night, Rubio said China is looking for a “short-term accommodation” with the U.S. and saw that the duties are taking a huge toll on its economy.
“The Chinese are reaching out,” Rubio said. “They want to meet, they want to talk.”
Representatives for the White House, Office of the U.S. Trade Representative and the departments of Treasury and Commerce didn’t immediately respond to requests for comment.
China’s factory activity slipped into the worst contraction since December 2023, the official manufacturing purchasing managers’ index showed this week. New export orders fell to the lowest since December 2022 and recorded the biggest drop since April that year, when Shanghai entered a citywide pandemic lockdown.
While expressing a newfound openness to talks, China’s Commerce Ministry framed its statement as being consistent with Beijing’s previous position. As a condition to negotiations, it asked the U.S. to “show its sincerity and be prepared to correct its wrong practices” by scrapping the unilateral tariffs.
“If we fight, we will fight to the end; if we talk, the door is open,” it said. “If the United States wants to talk, it should show its sincerity and be prepared to correct its wrong practices and cancel the unilateral tariffs.”
This story was originally featured on Fortune.com