During a White House news conference, former U.S. President Donald Trump said tariffs on goods from China will drop significantly. However, he made it clear they would not be eliminated entirely.
Trump made this statement after Treasury Secretary Scott Bessent said high tariffs were not sustainable. Bessent expected a step back from the trade war between the world’s two largest economies.
A Costly Trade Battle
Trump had set tariffs on Chinese imports at 145%. In response, China imposed a 125% tariff on U.S. goods. These moves added tension between the two nations. 
Trump also imposed tariffs on many other countries. As a result, the stock market stumbled. Investors feared slower growth and rising inflation. This caused interest rates on U.S. debt to rise.
Two people confirmed Bessent’s comments. They spoke anonymously due to the sensitivity of the discussion.
Bessent, in a transcript shared by the Associated Press, said that negotiating with China would be difficult. “Neither side thinks the status quo is sustainable,” he added.
Stocks Bounce Back on Bessent’s Words
News of Bessent’s remarks gave investors hope. The S&P 500 jumped by 2.5% after Bloomberg News reported them.
Trump later acknowledged the stock market’s reaction. He spoke after the swearing-in of Paul Atkins as chair of the Securities and Exchange Commission. However, Trump avoided confirming if he agreed with Bessent’s warning about the current trade situation.
“We’re doing fine with China,” Trump told reporters.
A Softer Tone on China
Trump insisted he would be “very nice” to China. He said he would not act aggressively toward Chinese President Xi Jinping. Despite his strong tariff policies, Trump seemed optimistic about future cooperation.
“We’re going to live together very happily,” Trump said. “And ideally work together.”
He emphasized that tariffs would be lowered. “It won’t be that high,” he said. “Not going to be that high.”
Broader Trade Negotiations
The Trump administration was not only focused on China. They also held talks with Japan, India, South Korea, Canada, Mexico, and the European Union.
Still, Trump had no plans to remove his default 10% tariff. He wanted other countries to lower their own import taxes. He also demanded the removal of non-tariff barriers that blocked U.S. exports.
China’s Warning to the World
Meanwhile, China issued a strong warning. It urged other nations not to strike deals with the U.S. that would hurt China.
“China firmly opposes any party reaching a deal at the expense of China’s interests,” the Ministry of Commerce said in a statement.
Despite that, there was growing interest in trade agreements with the U.S. White House Press Secretary Karoline Leavitt said 18 countries had submitted proposals. “Everyone involved wants to see a trade deal happen,” she added.
Trump Pushes Fed, But Walks Back on Firing Powell
Markets were also rattled by Trump’s comments on the Federal Reserve. He said the Fed should cut its benchmark interest rate.
Trump suggested he had the power to fire Fed Chair Jerome Powell. Later, he backed away from that idea. He said he simply wanted Powell to act early on cutting rates.
“I have no intention of firing him,” Trump clarified.
