Stocks ride May gains to best month since 2023 as investors look past trade concerns

But in remarks to reporters at the White House Friday, Trump calmed markets by saying he planned to speak with Xi about the rising tensions.

“They violated a big part of the agreement we made,” Trump said — while adding: “But I’m sure that I’ll speak to President Xi, and hopefully we’ll work that out.”

The “trade win” that the White House announced May 12 was expected to lead to China removing retaliatory tariffs and a suspension of “nontariff countermeasures taken against the United States.” Both sides agreed to lower tariffs on each other by 115% for 90 days.

In a statement earlier Friday, a Chinese Embassy spokesperson said that while both sides have continued to engage in discussions since the Geneva talks, “Recently, China has repeatedly raised concerns with the U.S. regarding its abuse of export control measures in the semiconductor sector and other related practices.”

Multiple media reports this week indicated the Trump administration has ordered U.S. companies to stop shipping high-level goods like chip design software and chemicals to China.

reported Thursday that the new restrictions were likely to escalate tensions with Beijing and “appear aimed at choke points to prevent China from getting products necess for key sectors.”

“China once again urges the US to immediately correct its erroneous actions, cease discriminatory restrictions against China and jointly uphold the consensus reached at the high-level talks in Geneva,” said the Chinese Embassy spokesperson, Liu Pengyu.

U.S. Trade Representative Jamieson Greer, speaking on CNBC on Friday morning as Trump posted his message, said “this has been something that we’ve been discussing” since meeting with China in Switzerland. “The Chinese are slow rolling their compliance, which is completely unacceptable,” Greer said.

“You make every effort to be diplomatic and professional and to do things behind closed doors. But at some point, the impact on on the U.S. economy, or the trade relationship, becomes such that it’s hard to withhold that anymore,” he continued.

On Thursday, Treasury Secret Scott Bessent said trade talks with China were “a bit stalled.” Bessent said he believed there would be more talks in the coming weeks but “given the magnitude of the talks,” Trump and Chinese President Xi Jinping would likely need to “weigh in with each other” first.

The matter hit a further snag Thursday after an appeals court temporarily reinstated a set of tariffs that a federal trade court had voided just hours earlier, casting fresh doubt on the path forward for Trump’s sweeping import taxes. The case is expected to make its way to the Supreme Court.

Since Trump took office, the S&P 500 has fallen approximately 2% — a modest decline that masks substantial weekly and even daily swings.

A Friday report showed consumer spending slowed from a 0.7% rate in March to 0.2% in April — adding to signs that Trump’s tariffs may be leading to an economic slowdown.

The data are “clear evidence that consumers are battening down the hatches,” Fitch Ratings analysts said in a note to clients, adding that Friday’s release from the Bureau of Economic Analysis also showed the highest savings rate since May 2024.

While the release also saw a favorable April inflation reading, the Fitch analysts said the Federal Reserve is “likely to interpret it as the calm before the storm” and continue to move cautiously on interest rates.