A day after U.S. President Donald Trump hinted at the prospect of a “substantial” reduction in tariffs on Beijing, China declared on Wednesday that the door was “wide open” for trade discussions with Washington. Trump also stated on Tuesday that he has no plans to fire U.S. Federal Reserve Chair Jerome Powell, which provided additional comfort to international markets alarmed by his tough trade policies.
Since his return to the White House in January, Trump has increased taxes on several Chinese goods by 145%. These include tariffs that were first put in place because of China’s purported involvement in the supply chain for fentanyl and then because of actions that Washington considered unjust.
Beijing retaliated by imposing broad counter-tariffs of 125% on US goods, but on Wednesday it reaffirmed its willingness to negotiate trade. “China pointed out early on that there are no winners in tariff wars and trade wars,” Chinese Foreign Ministry spokesman Guo Jiakun told a daily news conference in Beijing. “The door for talks is wide open.” Chinese President Xi Jinping also warned on Wednesday that trade wars “undermine the legitimate rights and interests of all countries, hurt the multilateral trading system and impact the world economic order”, state media said.
Beijing’s reaffirmation follows Trump’s admission that 145% was a “very high” percentage that would “come down substantially.” “They will not be anywhere near that number” but “it won’t be zero”, he said. “Ultimately, they have to make a deal because otherwise, they’re not going to be able to deal in the United States”, he further added.
Following Treasury Secretary Scott Bessent’s remarks at a private gathering on Tuesday that the tariffs amounted to a reciprocal trade embargo, those remarks were made. According to someone in the room, Bessent stated that he anticipated a de-escalation soon. At the press-closed event organized by JPMorgan Chase, he emphasized that such a development should provide some comfort to markets.
The markets were already uneasy due to Trump’s hardline trade policies, but his recent outbursts against Powell had heightened suspicions of his removal. Powell had come under fire from the Republican for predicting that the White House’s expansive tariffs strategy would probably cause inflation to spike again.
“I have no intention of firing him,” Trump said on Tuesday. “I would like to see him be a little more active in terms of his idea to lower interest rates — it’s a perfect time to lower interest rates. “If he doesn’t, is it the end? No.”
Following a report on Bessent’s trade remarks, which were made on the fringes of the World Bank and International Monetary Fund’s Spring Meetings, Wall Street’s major indexes surged. All Asian markets had a rally on Wednesday. As investors sought their traditional safe haven, gold slid down a day after reaching a record high, while the main indexes in Tokyo and Hong Kong both saw gains of almost two percent.
Bessent acknowledged the need for fair trade and stated that China needed to rebalance its economy, but he also stated that there was still much to be done with Beijing. Noting that container bookings between the two nations have recently declined as trade tensions have escalated, the Treasury chief emphasized that the objective is not to disconnect with China.
Additionally, Washington was “doing very well in respect to a potential trade deal with China,” White House Press Secretary Karoline Leavitt informed reporters. As nations struggle with Trump’s new and extensive tariffs, all eyes will be on the outcome of trade negotiations as international finance ministers and central bankers gather in Washington this week.
In phone conversations with his Austrian and British colleagues on Tuesday, China’s foreign minister Wang Yi urged the EU and the UK to cooperate with Beijing in securing global trade. According to local media, Japan was thinking about making concessions to appease Trump, and tariffs envoy Ryosei Akazawa was allegedly planning a second trip to Washington the following week.
