James Lewis

Trump softens trade stance toward China and raises optimism

President Donald Trump de-escalated a confrontation with China on Wednesday, dropping plans to impose strict limits on Chinese investment in U.S. technology companies and instead urging Congress to strengthen existing laws that apply to all foreign countries.

The administration's more conciliatory stance raised at least the possibility that the two sides could work toward a negotiated end to the punishing tariffs they're set to impose on each other's goods beginning July 6. And it fueled a temporary rally in financial markets, which had been reeling on fears of an escalating trade war.

Stocks sank late in the day, though, after Larry Kudlow, Trump's top economic adviser,...