Trump signals retreat on China tariffs
By Carl Samson
President Donald Trump announced this week that his administration’s record tariffs on Chinese goods will “come down substantially,” marking a potential reversal in the escalating trade war that has rattled global markets.
Catch up
The world’s two largest economies have been locked in an increasingly hostile trade battle, with the U.S. most recently imposing 145% tariffs on Chinese imports and China retaliating with 125% duties on American goods. While the Trump administration paused tariffs for most countries for 90 days to facilitate negotiations, it excluded China, leading Beijing to implement countermeasures such as export restrictions on critical minerals and the return of Boeing aircraft originally destined for Chinese airlines.
Markets responded positively to signals of de-escalation, with Asian stocks rising Wednesday and U.S. indexes gaining until Treasury Secretary Scott Bessent clarified there had been “no unilateral offer from the president to de-escalate.”
Backing down
Trump told reporters Tuesday that the current tariff rates would be reduced significantly, though not eliminated entirely. “One hundred and forty-five percent is very high and it won’t be that high,” he said. “It won’t be anywhere near that high. It’ll come down substantially. But it won’t be zero.” He also promised to “be very nice” toward China, saying “we’re going to live together very happily and ideally work together” rather than play hardball.
The administration, however, has sent mixed messages about negotiations. On Thursday, Trump claimed that “they had a meeting this morning” regarding trade talks, though he declined to specify who was involved. A White House official confirmed that lower-level discussions and phone calls had occurred this week, though Bessent had previously indicated no formal negotiations were underway.
“False news”
“China and the United States have not conducted consultations or negotiations on tariffs, let alone reached an agreement,” Foreign Ministry spokesperson Guo Jiakun said Thursday, dismissing such reports as “false news.”
Beijing earlier this week also warned countries negotiating with the U.S. over tariff exemptions at China’s expense, saying it would take “resolute and reciprocal” countermeasures. This follows reports that Trump planned to pressure trading partners to limit their trade with China.
The economic stakes continue to rise, with a German shipping group reporting Thursday that customers had canceled 30% of China-to-U.S. shipments due to trade tensions. Meanwhile, the International Monetary Fund has slashed growth forecasts for both nations.
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