President Donald Trump said Tuesday that U.S. tariffs on Chinese imports will “come down substantially,” suggesting a possible pivot in his administration’s approach to the ongoing trade war with China. The comments sparked a global market rally and triggered a mix of skepticism and cautious optimism from Beijing.
“It won’t be zero,” Trump told reporters during a White House briefing, referring to the steep tariffs that have reached as high as 145%. “But it won’t be anywhere near that high.”
The shift in tone came hours after Treasury Secretary Scott Bessent told investors that the trade war between the world’s two largest economies is unsustainable. Speaking at a private investment event hosted by JP Morgan Chase, Bessent said the goal is not total decoupling but a “rebalancing of trade.”
His remarks were echoed by market confidence, with Wall Street indexes rising sharply Tuesday afternoon. The S&P 500 and Nasdaq each jumped more than 2.5%. Asian and European markets followed suit on Wednesday.
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Beijing Responds with Caution
China’s Foreign Ministry responded Wednesday with a pointed statement calling on the U.S. to abandon threats and engage “on the basis of equality and mutual respect.” Ministry spokesperson Guo Jiakun said:
“Claiming to want dialogue while applying maximum pressure is not the path to resolution.”
Guo reaffirmed Beijing’s stance:
“We do not want to fight, but we are not afraid to fight. If it’s to talk, our door is wide open.”
On Chinese social media, the mood was less measured. The hashtag “Trump chickened out” trended on Weibo, racking up over 150 million views in under 24 hours.
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Markets React as Trump Softens on Trade and Fed
The president’s comments helped stabilize global markets after weeks of turbulence. Alongside the tariff news, Trump also reversed course on recent attacks against Federal Reserve Chair Jay Powell, saying he had “no intention” of firing him.
That remark alone helped bolster investor confidence, following a rocky week during which Trump called Powell a “major loser” and hinted he could be removed before the end of his term.
The dual pivot—on tariffs and the Fed—fueled gains in U.S. equities, the dollar, and crude oil prices. Brent crude climbed past $68 a barrel, while gold prices pulled back from recent record highs.
Trade War Continues, But Tone Shifts
Key trade issues remain unresolved. China has continued to retaliate with its own tariffs, trade restrictions, and public pushback against U.S. tech and media companies.
Diplomatic sources say Beijing has been frustrated by the lack of a clear point of contact in Washington, as Trump appears to be leading the negotiation effort himself—something that runs counter to China’s highly structured diplomatic approach.
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Still, both sides have reasons to de-escalate: markets are jittery, inflation remains high, and supply chains continue to buckle under pressure from years of tit-for-tat tariffs.
