After plunging Friday when China and the U.S. unveiled new tariffs, retail stocks gained back some of those losses Monday as investors were boosted by President Trump’s comments at the G7 leaders summit in Biarritz, France.
“China called last night our top trade people and said ‘Let’s get back to the table,’ so we will be getting back to the table and I think they want to do something,” Trump told reporters at the summit.
“They have been hurt very badly, but they understand this is the right thing to do and I have great respect for it. This is a very positive development for the world,” he added.
There was some confusion, though, as when asked about the call, Geng Shuang, the spokesman for the Chinese foreign ministry, reportedly responded that he was not aware one took place.
Probed further on the matter later in the day, Trump said: “I don’t want to talk about calls. We’ve had calls. We’ve had calls at the highest levels.”
Nevertheless, despite the confusion, Trump’s comments calmed the markets, with the Dow Jones Industrial Average closing up on Monday by 267 points, or 1 percent, to 25,898.83. The S&P 500 was up 1.1 percent, while the Nasdaq was 1.3 percent higher.
Among the retail stocks finishing the day in positive territory were Ascena Retail Group, up 11 percent, to 28 cents; Vince Holding Group, 10.2 percent to $12.20; Tapestry Inc., 2.8 percent to $20.88; Tiffany & Co., 2.2 percent to $83.08; G-III Apparel Group, 2 percent to $20.26, and Nordstrom Inc., 1 percent to $28.85.
On Friday, the Dow closed down more than 600 points after Beijing unexpectedly revealed it would impose tariffs on $75 billion of American imports Friday. They will come into effect on Sept. 1 and Dec. 15.
The U.S. retaliated after the markets closed, with Trump tweeting that existing tariffs on $250 billion worth of Chinese imports, including handbags, would rise from 25 percent to 30 percent on Oct. 1.
He also said levies on another $300 billion, which include apparel and footwear, will now be set at 15 percent instead of 10 percent. Some of those will come into force on Sept. 1. The remaining goods will be hot on Dec. 15.
Nelson Dong, a senior partner at the international law firm Dorsey & Whitney law firm, said: “It is difficult to see how these rapid volleys of tariffs and counter-tariffs can help the two teams of government negotiators to reach any kind of ‘deal’ that would be acceptable to both President Trump and President Xi [Jinping] or can avoid the spreading collateral consequences for many thousands of suppliers and customers.
“Tariffs are and always have been taxes paid by an importer in order to gain customs clearance and entry into the importing country, and the cost of tariffs will thus be factored into the price of such imported goods, which are then passed down the supply chain to the ultimate user or customer at the end of that chain,” he added.