President Donald Trump has hinted at reducing tariffs on China, signaling a potential temporary truce in the U.S.-China trade war.
On Wednesday, Trump suggested that tariffs on China could be adjusted downward, indicating that a decision on the tariff levels might be made within the next two to three weeks.
The day before, he commented that while the 145% tariff on Chinese imports sounds very high, the actual rate would likely be lower.
On Wednesday, The Wall Street Journal (WSJ) reported, citing White House officials, that the Trump administration is considering lowering tariffs on China to between 50% and 65%.
Treasury Secretary Scott Bessent also suggested that there is potential for a major U.S.-China trade agreement, emphasizing that a joint effort could help achieve a rebalanced trade relationship.
He added that China could begin by moving away from its reliance on export overcapacity and instead focus on strengthening domestic consumption and supporting its own consumers. He emphasized that such a shift would aid in achieving the global economic rebalancing that is urgently needed.
The saying It Takes Two to Tango applies here, meaning that without a response from China, U.S. overtures may fall flat.
Surprisingly, China has been responding positively. The previous day, they stated that the door to dialogue with the U.S. is wide open, suggesting their willingness to engage in trade negotiations.
During a regular briefing on Wednesday, Chinese Foreign Ministry spokesperson Guo Jiakun emphasized that China had long maintained there are no winners in a tariff or trade war and affirmed that the door to dialogue with the U.S. remains wide open.
As a result, the likelihood of U.S.-China trade negotiations suggests that the trade war may enter a temporary ceasefire.
Renowned U.S. investment bank Piper Sandler released a report that day predicting a likely short-term truce between the U.S. and China.
Piper Sandler assessed that if Trump cancels all tariffs except for the 20% imposed before April 2, when he levied mutual tariffs globally, China will likely come to the negotiating table. It also noted that the chances of a brief truce in the U.S.-China trade war have increased.