In the latest internal debate between administration officials on trade with China, President Trump sided Treasury Secretary Steven Mnuchin, left. (Jabin Botsford/The Washington Post)

President Trump on Wednesday softened proposed limits on China’s right to invest in U.S. technology companies, the latest sign of an on-again, off-again trade war that is raising doubts about his ability to wring concessions from Beijing.

Trump’s retreat from the broader investment caps that he had considered came after a bruising internal battle between Treasury Secretary Steven Mnuchin and China hard-liners led by Peter Navarro, a senior White House aide.

The president sided this time with Mnuchin, who recommended relying upon an enhanced Treasury-led investment review panel rather than a more aggressive approach that would have declared an economic emergency and dramatically limited China’s ability to buy into American companies.

In his approach to China, Trump repeatedly has oscillated between tough talk and conciliation. He has often criticized China harshly, accusing it of “economic aggression,” yet insisted that he considers Chinese President Xi Jinping a friend.

He recently intervened to save Chinese telecom company ZTE from harsh penalties for violating U.S. sanctions on trading with Iran and North Korea, tweeting that he feared “too many jobs in China” would be lost.

Just last week, the president threatened to impose tariffs on almost all Chinese goods shipped to the United States, a move that reflected Navarro’s enduring influence. But in an appearance Wednesday before a youth group,, Trump expressed hope for a deal with Beijing.

“We’re working with China now, and I think hopefully that’ll get straightened out,” he said.

Some business executives — pleasantly surprised by the president’s change of course — and administration officials said they feared that criticism of Trump for going soft on China could cause the president to swing back toward the hard-line camp at any moment.

“We have a confusing message coming from our government,” said David Kotok, chief investment officer of Cumberland Advisors, which manages $3 billion in assets. “If policy evolves in a week, and it’s based on what somebody sees on Fox News, then you’ve got a problem.”

Fears of a trade war are starting to affect financial markets, especially shares of the largest corporations that are exposed to global trends, he said. The Dow Jones industrial average, which fell more than 165 points Wednesday, is down more than 9 percent from its January peak.

Wednesday’s announcement comes amid an intensifying trade dispute between the United States and China. Tariffs on $34 billion in Chinese products are scheduled to take effect July 6, with up to an additional $416 billion possible in subsequent months.

The president’s frequent policy shifts make him a “sloppy protectionist,” according to Scott Kennedy, a China expert at the Center for Strategic and International Studies. “Like Goldilocks, the policy is either too hot or it’s too cold. We still have not found that ‘just right’ approach.”

For much of the past three months, the president had signaled his intent to impose limits on China’s ability to invest in advanced American technologies. On May 29, the White House said that new “investment restrictions and enhanced export controls will be announced by June 30” and implemented shortly thereafter.

Instead, the promised export controls were replaced by a Commerce Department study and a reliance upon legislation to enhance the Committee on Foreign Investment in the United States, or CFIUS.

“It appears there is a tug-of-war in the administration over just how strong the president should be with China. One week he’s pulled one direction, the next, the opposite,” said Senate Minority Leader Charles E. Schumer (D-N.Y.).

The Treasury-led panel reviews proposed acquisitions of U.S. assets by foreign investors, which the president can veto.

The House and Senate have approved giving the CFIUS panel jurisdiction over investments not covered under current law, including minority stakes. The measures passed with strong bipartisan support in both chambers.On Tuesday, the House bill was approved 400 to 2.

David Dollar, the Obama administration Treasury Department’s top economic emissary to China, called Trump’s approach to China “chaotic” and said it left Beijing confused about his ultimate aims.

“What’s the priority? You’ve got some harsh actions and then you have talk about even harsher things, and the administration pulls back from some of that,” said Dollar said. “It’s confused the Chinese about what the U.S. really wants.”

The president agreed to the recommendation to soften his stance on Tuesday, Mnuchin told reporters. The treasury chief insisted that White House advisers were “100 percent unanimous” in favor of the decision.

“We have different views, and the benefit of the president having different advisers is at times we will express different views. That’s a healthy process. I respect at the end of the day it’s the president’s decision,” Mnuchin said.

Officials had considered limiting Chinese-owned companies from acquiring more than 25 percent of American firms that own sensitive technologies, and reaction to the easing from one prominent Republican was negative.

“If in fact President Trump is now backtracking on tough limits on Chinese investment, it is a VERY BIG MISTAKE,” Sen. Marco Rubio (R-Fla.) wrote on Twitter. “#China is strategically buying up U.S. companies specializing in cutting edge technology. What they don’t steal from us they buy away from us.”

On Wednesday, Trump said the proposed legislation would allow the United States to protect its technological crown jewels without compromising an open investment climate.“I have concluded that such legislation will provide additional tools to combat the predatory investment practices that threaten our critical technology leadership, national security, and future economic prosperity,” he said.

The investment policy outcome marks Mnuchin’s emergence as a more savvy bureaucratic player than the Washington neophyte of one year ago. When Gary Cohn, the White House’s top economic adviser, resigned earlier this year, Trump increasingly solicited advice from Navarro, a staunch protectionist.

But instead of bucking Trump publicly, Mnuchin quietly worked to defend his Treasury turf while remaining deferential to the president.

“Mnuchin, it seems like he is prevailing on a lot of these disputes,” said Steve Moore, who was a top economic adviser to Trump during the campaign.

Still, the president’s frequent tactical shifts mean no adviser’s victory is ever permanent. Having tried threats and peace offerings, the administration remains in search of a winning approach to China.

“Up until now, it hasn’t worked. Nothing’s worked,” said Carlos Gutierrez, chair of Albright Stonebridge Group and a Commerce secretary under President George W. Bush.