China stocks drift as investors keep guessing Trump’s tariff intention

SHANGHAI: China stocks drifted and Hong Kong shares fell on Thursday as Washington signalled a willingness to lower tariffs against China, but ruled out unilateral moves, bewildering investors over how the damaging Sino-US trade war will evolve.

China’s blue-chip CSI300 Index and the Shanghai Composite Index seesawed between gains and losses before closing roughly flat.

Hong Kong benchmark Hang Seng Index dropped nearly 1%, led by tech shares.

US Treasury Secretary Scott Bessent said on Wednesday that high tariffs between the US and China are not sustainable, as President Donald Trump’s administration signalled openness to de-escalating the trade war. However, Bessent also said Trump would not make that move unilaterally.

The United States should lift all unilateral tariff measures against China if it “truly” wanted to solve the trade issue, China’s commerce ministry said after local market close, adding the two countries have not been engaged in trade negotiations.

“A trade war between China and the US is a lose-lose situation. Common sense tells us the two nations will eventually come to the negotiation table and reach an agreement,” wrote Bin Shi, head of China equities at UBS Asset Management.

“But the timing and extent remain to be seen... At this stage, many questions remain unanswered as tariff developments and potential investment implications change day by day.”

Chinese President Xi Jinping “will definitely not make the first move. But if Trump’s advisors can devise a face-saving off-ramp from the tariff war, Beijing will be a willing partner,” said Gavekal Dragonomics. Technology shares led the decline on Thursday.