The Trump administration is weighing cutting Chinese import tariffs in a potential softening of its current trade war with Beijing, a source knowledgeable about the subject said on Wednesday. Any move would be predicated on talks and not occur unilaterally.
The report came after a Wall Street Journal report that indicated the White House is considering reducing tariffs from their current levels of 145% to between 50% and 65%. President Trump, in an address to reporters, reaffirmed his need for a “fair deal” with China but did not confirm details from the report. On Tuesday, he had been optimistic that a deal could be reached.
White House spokesperson Kush Desai rejected tariff rumor-mongering, stressing that only Trump’s own words are authoritative.
Even with the possible tariff reductions, the levels being offered would still be large enough to deter sizable trade. German shipping behemoth Hapag-Lloyd saw a 30% cancellation rate on US-destined shipments from China.
China retaliated, on its part, with 125% tariffs against American imports as well as further trade action. Treasury Secretary Scott Bessent admitted both parties consider the prevailing tariff rates untenable, but he did not know when negotiations would start officially again. Reported to be in limbo were negotiations intended to address the fentanyl threat.
American markets responded positively to the news, with the S&P 500 increasing by approximately 3% in mid-morning trading as investors breathed a sigh of relief over Trump’s less confrontational tone and not removing the head of the Federal Reserve.
The Journal further stated that several tariff approaches are still on the table, such as a tiered system where lower tariffs are applied to non-strategic products and higher tariffs to strategic ones. In the meantime, Trump’s overall tariff policies, such as a blanket 10% tariff on all imports and higher duties on industries such as steel, aluminum, and autos, continue to weigh on global economic growth.
