Trump says China tariffs will ‘come down substantially,’ hinting at potential U-turn

Despite the continued volatility of the market, US President Donald Trump has indicated that he may end his trade war with China. He stated that the high tariffs placed on Chinese goods will “come down substantially, but it won’t be zero.” After weeks of tough posturing and tit-for-tat retaliation that sent tariffs on China above a staggering 145%, Trump’s remarks at a White House news event on Tuesday appear to mark a rhetorical retreat. During a Q&A session with reporters in the Oval Office, Trump said, “145% is very high and it won’t be that high.” “It won’t even come close to being that high. It will decrease significantly. However, it won’t be zero. When asked about remarks made earlier in the day by Treasury Secretary Scott Bessent that the high tariff rates between the United States and China have effectively blocked trade, Trump made the remarks. A person familiar with the situation confirmed this to CNN: “Bessent said at a private investment conference hosted by JP Morgan Chase that the trade war with China is unsustainable and that he expects the battle to deescalate in the very near future.” The source told CNN that Bessent told investors that the goal is a rebalancing of trade, not a hard break or complete decoupling between the United States and China. That assessment fueled a rally on Wall Street that had begun earlier on Tuesday. After Bessent’s remarks were made public, all three major US stock indexes reached their highest levels of the day. On Wednesday, Asian stocks also increased, with the Hang Seng Index in Hong Kong leading the regional gains and ending the trading day up more than 2%. Japan’s Nikkei 225 finished about 2% higher and South Korea’s Kospi closed up 1.5%.
China’s Foreign Ministry advised the United States to “stop its threats and coercion, and engage with China on the basis of equality, mutual respect, and reciprocity” when asked about Trump and Bessent’s remarks on Wednesday. The JL MAG Rare-Earth Co.’s production process and operations are discussed with Chinese President Xi Jinping, who is also general secretary of the Communist Party of China Central Committee and chairman of the Central Military Commission. Ltd., as well as the growth of the rare earth industry in Ganzhou, Jiangxi Province, east China, on May 20, 2019. Related piece China has a powerful card to play in its fight against Trump’s trade war
“Claiming it wants to reach an agreement with China while constantly applying maximum pressure is not the right way to engage with China — and it simply won’t work,” Guo Jiakun, a spokesperson for the ministry, told reporters at a regular news conference.
“China’s position on the tariff war initiated by the United States is very clear: We do not want to fight, but we are not afraid to fight. We will fight until the end if we must. If it’s to talk, our door is wide open,” he added.
The Chinese internet also picked up on Trump’s shift in tone. On Wednesday, the hashtag “Trump chickened out” was trending as a top topic on social media platform Weibo, racking up more than 150 million views.
In a fight that quickly escalated, the two largest economies in the world have slapped record tariffs on each other, upsetting global markets, disrupting supply chains, and stoking fears of a recession. China has remained steadfast in its defiance thus far. Instead, it retaliated by raising tariffs on US goods to 125%, adding more American companies on its export control list and unreliable entity list, and restricting the export of critical minerals used in everything from iPhones to missile systems.
In addition, Beijing took steps to hurt key US industries by returning at least two Boeing jets that were intended for Chinese airlines to use in the US and limiting the number of Hollywood films shown in the country. trump china uturn 16×9.jpg
‘Very nice’
Through it all, Trump has insisted that he has a “very good relationship” with Xi Jinping while waiting for the Chinese leader to reach out – and has told his team that the US will not make the first move, CNN reported earlier.
To counter US efforts to use the tariff war to isolate China economically, Xi has launched a diplomatic charm offensive with other trade partners rather than calling Trump to negotiate tariffs. Trump reiterated his desire for Xi to join the negotiations on Tuesday, promising to “be very nice.” Trump quickly responded, “No,” when asked if the United States would play hardball with China or Xi in order to reach a deal or if officials would mention the Covid-19 pandemic. “No, no, we will be extremely courteous. We’ll see what happens, and they’ll be very nice,” the president continued. “But ultimately, they have to come to an agreement because we want them to be involved and they won’t be able to do business in the United States otherwise.” He stated, “I think it’s going to work out very well” because “I think we’re going to live together very happily and ideally work together.” A person familiar with the Chinese government’s thinking told CNN last week that before Trump unveiled his “Liberation Day” tariffs on April 2, China had designated a point person for talks with the US, and that Beijing was unclear about the right contact on the US side. Trump may want to be his own negotiator, but this isn’t compatible with how China works, the source added.
Referencing hawkish or even hostile views on China expressed by Trump’s Cabinet members, the person said Trump’s failure to reject such views suggested he condoned them despite his public assertions about respecting and liking Xi.
China slammed US Vice President JD Vance earlier this month for his remarks about “Chinese peasants” in an interview that has been widely mocked on China’s internet.