US President Donald Trump has signaled a potential U-turn on his trade war with China amid continued market volatility, saying the high tariffs on Chinese goods will “come down substantially, but it won’t be zero.”
Trump’s remarks, made at a White House news event Tuesday, appear to mark a rhetorical climbdown after weeks of tough posturing and tit-for-tat retaliation that sent tariffs on China beyond a staggering 145%.
“145% is very high and it won’t be that high,” Trump said in a question-and-answer session with reporters in the Oval Office. “It won’t be anywhere near that high. It’ll come down substantially. But it won’t be zero.”
Trump made the comments when asked about Treasury Secretary Scott Bessent’s remarks earlier in the day that the high tariff rates between the United States and China have effectively embargoed trade between the economies.
Bessent said at a private investment conference hosted by JP Morgan Chase that the trade war with China is unsustainable and he expects the battle to de-escalate in the very near future, a person familiar with the matter confirmed to CNN.
Instead of a hard break or complete decoupling between the United States and China, Bessent told investors that the goal is to have a rebalancing of trade, the source told CNN.
That assessment gave a boost to a Wall Street rally that had taken shape earlier on Tuesday, with all three major US stock indexes hitting their highest levels of the day after Bessent’s remarks were made public.
Asian stocks also rose on Wednesday, with Hong Kong’s Hang Seng Index leading the regional gains, ending the trading day more than 2% higher. Japan’s Nikkei 225 finished about 2% higher and South Korea’s Kospi closed up 1.5%.
Asked about Trump and Bessent’s comments on Wednesday, China’s Foreign Ministry said the US should “stop its threats and coercion, and engage with China on the basis of equality, mutual respect and reciprocity” if it wants to make a deal.