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Snap-on CEO says China is 'more concerned than I heard them in a long time'

Key Points
  • "In China, it's a time of uncertainty there, because they don't know how to react to" the pressure from the U.S. trade war, says Snap-on's Nicholas Pinchuk.
  • Pinchuk says Snap-on sales in China have been strong over the past year but he's not sure how long that can hold.
  • Financial markets Monday got some relief as President Trump told reporters that China called and said it was ready to restart trade talks.
VIDEO9:1909:19
Nick Pinchuk: China is not stealing American jobs but there are still concerns

Snap-on Chairman and CEO Nicholas Pinchuk told CNBC on Monday that the Chinese are more worried about trade now than he's ever seen them.

He said Snap-on's sales in China have been strong over the past year but he's not sure how long that can hold on as the trade war between Beijing and Washington intensifies.

"It's getting tougher to make those gains," he said.

Financial markets on Monday got some relief as President Donald Trump told reporters China was ready to restart trade talks. Dow futures, down 300 points overnight, turned around and spiked higher Monday on Trump's remarks. The Dow Jones Industrial Average opened up about 200 points on Wall Street on Monday, after plummeting more than 600-points on Friday.

The White House on Friday announced new tariff-hike plans, after China unveiled tariff-retaliation for the upcoming new U.S. levies, set to go into effect Sept. 1 and Dec. 15.

"China called last night our top trade people and said 'let's get back to the table' so we will be getting back to the table and I think they want to do something," Trump said at the G-7 summit in France. "They have been hurt very badly but they understand this is the right thing to do and I have great respect for it. This is a very positive development for the world."

But the escalating trade war between the world's two largest economies has caused Beijing's growth to slow, which is Pinchuk said is an unfamiliar move.

"In general, when you talk to people in China, they're more concerned than I heard them in a long time," Pinchuk told "Squawk Box."

"In China, it's a time of uncertainty there because they don't know how to react to this thing," he added. "They've never known how to react to a downward" trend in economic confidence.

China's total debt rose to over 300% of its gross domestic product in the first quarter of 2019, which is a slight increase from the previous year, according to a report by the Institute of International Finance.

In the second quarter, China said its economy grew at its lowest rate in 27 years as the trade war with the U.S. continued to take its toll.

Pinchuk predicts a resolution between China and the U.S. will be reached after China's National Day on Oct. 1, which celebrates the formation of the People's Republic of China.

"Right now, the Chinese are trying to manage over this celebration," he said. After that, he said, negotiators are free to make a deal. "You've got to get by that to have political cover in China to have meaningful negotiations."