Markets took a dive on Tuesday after news that US President Donald Trump’s threat of new tariffs on Chinese goods was official policy – as of 12:01am Friday.

Investor sentiment moved swiftly from a belief on Monday that a Trump tweet heard around the world was just bluster to a realization that it might be more than that after comments from top US officials.

But hawkish Trump advisers signaled that there was some room for a compromise this week when talks resume in Washington.

Michael Pillsbury, who Washington insiders say maintains influence as an outside adviser to Trump, said on Tuesday that the sell-off presented an opportunity.

“The idea of buying on a dip could pay off handsomely if the talks make a lot of progress Thursday and Friday, even with the tariffs on, and then the market compensates and jumps up 500 points or more,” Pillsbury said in an interview on Fox Business Network.

Others noted that there was little chance the top Chinese negotiator, Vice-Premier Liu He, would travel to Washington if he did not have something substantial to offer.

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