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"This whole trade thing has exploded", Mr Kudlow said.

President Donald Trump has asked trade officials to explore the possibility of the United States rejoining negotiations on the Pacific Rim agreement after he pulled out a year ago as part of his "America first" agenda.

President Trump may, or may not, be having a change of heart about re-entering the Trans-Pacific Partnership.

Ministers from Japan, Australia and Malaysia welcomed US President Donald Trump directing officials to explore returning to the TPP, a pact he withdrew from shortly after taking office.

But when 11 remaining countries inked the final deal - now known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) - in March, the agreement lacked numerous provisions US negotiators had long argued to see included.

"Would only join TPP if the deal were substantially better than the deal offered to Pres. Obama", Trump wrote on Twitter.

The remarks were another conciliatory signal from the administration following tit-for-tat tariffs proposals from the world's largest two economies that rattled markets. Taro Aso, Japan's finance minister and deputy prime minister said that "if the news is true, we would welcome it".

"It's hard to bring part of the pact and renegotiate it", he said, calling it a "well-balanced pact" that carefully addressed the needs of the current 11 member nations.

The S&P 500 Index closed up 0.8% and the Dow Jones Industrial Average added nearly 300 points, or 1.2%, as investors assessed the changing trade dynamics.

For its part, the Trump administration worries that the partnership will become a zero-tariff backdoor for Chinese goods into the US market.

The deal, negotiated by the Obama administration, was largely intended as a tool to prod China into making economic changes that the USA and others have long wanted.

Ben Sasse of Nebraska told reporters Thursday after meeting with Trump at the White House. Rejoining the trade pact would open up some strict Asian markets to US auto exports, provide patent protection for USA drugmakers and reduce regulations on some big tech companies such as Google and Uber, he added. For instance, ranchers in Australia can send beef to Japan more cheaply than ranchers in the US. "And that includes what they're going to buy for genetic stock."Republicans and Democrats in farm-state legislatures in the Midwest are urging the president to tread carefully, warning him of the potential consequences of a trade war".

The news infuriated labor unions and many working-class supporters of the president.

Trump had tweeted that the U.S. would only join TPP if the deal were substantially better than the deal offered to former president Barack Obama.

The TPP, a trade deal that was to involve 12 countries including the United States, was conceived under former President Barack Obama as a way to counter China's surging power in the region. "He's going to get rid of a lot of taxes and tariffs", Trump said of the Chinese leader.

US Commerce Secretary Wilbur Ross later said the administration needs to see concrete actions from China to reach a deal.