Wall Street Boosts on Trump’s Intention to Lower China Tariffs
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US President Donald Trump has stated his intention to reduce tariffs on Chinese goods, but the timeline for these tariff reductions will be dependent on Beijing. Trump said he will be announcing new tariff rates on US trading partners, including China, in the next few weeks. However, the president’s comments have led to a rally on Wall Street, with hopes that trade tensions between Washington and Beijing will de-escalate.
President Trump Considers Reducing Tariffs on Chinese Goods
US President Donald Trump hinted at potentially reducing the debilitating tariffs imposed on China. However, he stressed that any tariff relief will be contingent on Beijing’s actions. Trump suggested that new tariff rates on US trading partners, including China, could be announced in the coming weeks, depending on the outcome of his administration’s ongoing negotiations.
Trump declared that the US is prepared to strike excellent deals, even as he maintained his stand on imposing tariffs in the absence of satisfactory agreements. He expressed optimism towards reaching a deal with Chinese President Xi Jinping, while emphasising that the US will set a price if necessary.
His comments coincided with a second consecutive day of rallying on Wall Street, driven by hopes of a de-escalation of trade tensions between the US and China, the world’s two largest economies. The S&P 500 and Nasdaq Composite indices both closed significantly higher, a continuation of gains following US Treasury Scott Bessent’s statement that a trade war with China is “unsustainable”.
Recent reports suggest the Trump administration is contemplating reducing tariffs on Chinese goods by 50-60% as part of measures to ease trade tensions. However, the US expects reciprocal action from China by reducing its 125% tariffs on US goods.
Earlier this week, Trump acknowledged the intensity of his 145% tariff on China, pledging a considerable decrease in the future. China, on the other hand, has voiced opposition to protectionist measures such as tariffs, insisting it’s ready to “fight to the end” should the US continue escalating its trade actions.
Global Impact and Legal Challenges to the US-China Trade War
The ongoing US-China trade war has global implications, leading to fears of an economic slowdown. The International Monetary Fund recently downgraded its 2025 growth projection from 3.3% to 2.8%.
The legality of Trump’s tariffs is also being challenged domestically. A group of 12 US states, including Arizona, Colorado, Connecticut, Illinois, and New York, filed a lawsuit challenging Trump’s authority to impose the tariffs without congressional approval. The lawsuit, filed at the US Court of International Trade in New York, accuses Trump of disrupting the constitutional order and creating chaos in the economy. Arizona Attorney General Kris Mayes decried Trump’s “insane tariff scheme” as “economically reckless” and illegal.
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