Markets surge as US softens trade war tone and US/N Korea plan talks

US markets surged 400 points before falling back as US officials tried to soften trade war predictions and news of a potential meeting between the North Korean and US leaders emerged.

White House trade adviser Peter Navarro says the administration is serious about imposing tariffs on China but also views them as a negotiating tactic.

"We're clear-eyed about this. We're moving forward on a measured way with tariffs, with investment restrictions ... and what we want from China is very clear: We want fair and reciprocal trade. We want them to stop stealing our stuff,” he says.

At market close, the Dow Jones industrial average gained 1.5% (or 346 points) rising to 23,979.17, before closing at 23,979. Stocks at Merck and Intel performed particularly well.

The S&P 500 also gained 1.5% to 2623.67, with tech surging 2.1%, before closing at 2615. The Nasdaq composite advanced 1.7%, rising to 7035.70 at the height of the day, but closed at 6950.

And after a troubling month of controversy Facebook shares led the pack along with Amazon, Apple and Alphabet, all rising more than 1%.

Hoping to cool markets even further, US Treasury Secretary Steve Mnuchin refused to say whether talks with China are meeting with any success, but also that he doesn’t expect a trade war to break out with Beijing.

"Our objective is to continue to have discussions with China. We want to have free and fair reciprocal trade.

"So, I don't expect there will be a trade war. It could be, but I don't expect it at all. But the president is willing to make sure we have free and fair trade, as you've seen his tweet already this morning; and, again, he has a very close relationship with President Xi, and we'll continue to discuss these issues with them,” he says.

US deficit to hit $1 trillion
The Congressional Budget Office recently released its estimate for the US budget deficit, estimating that it will break $US1 trillion in 2020, two years earlier than previous estimates.

The CBO place the blame on tax cuts. "The legislation has significantly reduced revenues and increased outlays anticipated under current law," the report reads.

Kim/Trump meeting?
North Korea has told the United States that its leader, Kim Jong-un, is willing to discuss denuclearisation of the Korean Peninsula, the first direct confirmation that he intends to participate in an extraordinary meeting with President Trump about his nuclear program.

The North delivered its message in secret talks between its representatives and American officials as they prepare for the summit meeting, which is expected to take place next month.

“I think there will be great respect paid by both parties and hopefully we’ll be able to make a deal on the de-nuking of North Korea. They’ve said so, we’ve said so, hopefully it’ll be a relationship that’s much different than it’s been for many, many years,” says Mr Trump.

Meanwhile, Beijing appears to have gone well beyond UN sanctions on the North Korean regime, reducing its total imports from its neighbour in the first two months this year by 78.5% and 86.1% in value – a decline that began in late 2017, according to the latest trade data from China. Its exports to the North also dropped by 33% to 34% both months.

Syria airstrikes
Missiles struck the Tiyas Military Airbase in central Syria overnight killing at least 14 people, including Iranians. The strike comes after a suspected chemical weapons attack in the Syrian town of Douma.

Although the state-run news agency said it was likely "an American aggression," US officials denied the United States had launched any strikes. Observers on the ground in Homs, immediately to the west of the airbase, recorded video showing missiles in the skies around the time of the attack, most likely Syrian air defence responding to the attack. 

Though unconfirmed, there is a strong possibility that the Israel Defence Forces were behind the strike. This is the same airbase from which an Iranian drone entered Israeli airspace in February. The Israeli military had no immediate comment on the reported missile strike.

US President Donald Trump announced he would decide within the next 24 to 48 hours about whether to retaliate for the Syrian chemical weapons attack. The United Kingdom and France are also deciding how to respond.

NAFTA news
Mexican Economy Secretary Ildefonso Guajardo says there is an 80% chance that NAFTA parties could reach an agreement in principle by the first week of May, adding that progress was made when the US backed down from its 50% domestic content requirement and 85% regional content requirement for automobiles.

"We're still talking and figuring out the best schemes for each of the working groups to continue getting work done. But the technical work continues, and that's a fact," says Mexican chief NAFTA negotiator Ken Smith Ramos.

Mr Guajardo also noted the urgency for the United States to present a plan for a revised trade agreement to the US Congress, before midterm elections in the fall. US President Donald Trump hoped to present a revised NAFTA deal at the Summit of the Americas from April 13 to April 14 in Lima, but it is more likely that a preliminary deal could be revealed.

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