President Trump sought to tamp down a trade war with China on Wednesday, acknowledging that the 145 percent duty he slapped on Beijing is “very high” while appearing to be optimistic that he can strike a deal with President Xi Jinping to calm nerves in the U.S. markets.
“We’re dealing with a lot of countries right now and could be with China, but maybe we’ll make a special — you know, a deal — and we will see what it will be. Right now, it’s at 145 percent, that’s very high,” Trump said Wednesday, following remarks the day before when he suggested the China tariff “come down substantially.”
Asked to respond to a Chinese government official who said the U.S. should stop “threatening and blackmailing China,” Trump insisted he had a good relationship with Xi.
“I have great relationships in China, with President Xi in particular, but China has been charging us massive tariffs for many years,” Trump said. “We’re going to get along great with China, I have no doubt about it.”
But Trump also gave no indication that the massive tariffs on Chinese goods would be going away anytime soon, something that is sure to keep the markets rattled.
A number of factors contributed to Trump’s decision to leave the door open to negotiating a lower rate with Beijing, including the market reaction and warnings from top business executives, sources who spoke to The Hill outlined.
The president met with CEOs of U.S. retailers, including Walmart, Target, Home Depot on Monday, which had a hand in his tone shift the next day. The negotiations are now also being led by Treasury Secretary Scott Bessent, as opposed to other administration officials.
The CEOs went into the meeting with Trump aiming to convey that they’re worried about higher prices for consumers, including during the holiday season at the end of the year, one lobbyist source described.
Later, White House spokesman Kush Desai told The Hill in a statement: “The only interest guiding President Trump’s decision making is the best interest of the American people.”
Bessent for his part, told a private meeting of investors on Tuesday that he expects a “de-escalation” in the trade war between the U.S. and China, according to multiple reports. Hours later, Trump told reporters in the Oval Office that the hefty tariff on China will be reduced.
By Tuesday afternoon, the stock had rallied after Bessent’s comments. It closed overall with solid gains.
Monday was a different story. The markets that day closed with losses after Trump attacked Federal Reserve Chair Jerome Powell – something markets majorly dislike. Trump has since walked back those comments, and insisted by the next day he had “no intention” to fire Powell, which would cause upheaval.
The Dow Jones Industrial Average opened on Wednesday with a gain of more than 700 points and closing with a gain of more than 400 points.
When it comes to China, a source close to Trump World described the messaging strategy as somewhat chaotic but insisted there was no daylight between Trump and his Treasury secretary.
“White House [is] simply rudderless messaging-wise regarding tariffs. Audience now exclusively Wall Street and not blue collar Rust Belt Main Street,” the source said.
Another source close to the White House said Bessent didn’t get ahead of the president “substantively,” but timing wise moved the markets before him. The source added that Bessent is leading the rhetoric on tariffs, though.
“The center of gravity on tariffs has moved from [Commerce Secretary Howard] Lutnick, [White House trade adviser Peter] Navarro, to Bessent,” the source said.
Trump acknowledged the bond market was a factor in his announcing a 90-pause on reciprocal tariffs on April 9, just days after he made his initial announcement that slapped tariffs on nearly every country in the world. Trump said shortly after the pause that the steep drop in demand for U.S. Treasuries were making people “a little queasy.”
On Monday, selloffs of U.S. bonds and dollars once again escalated.
“People got really spooked about the impact on the bond markets and the stock market is like the cardiac exam of the potential deeper problem,” the source close to the White House said. “All the market reactions you can recover. But there are there deep systemic problems that are the root of market problems, as reflected in the bond market, you might not be able to recover from that.”
The White House has said it is in talks with 90 countries on tariff deals and that if deals aren’t struck before the 90-day pause ends, the U.S. will set the tariff rate. Additionally, White House press secretary Karoline Leavitt on Wednesday said there will be “no unilateral reduction in tariffs against China” and that China has to make a deal with the U.S. on tariff rates.
China responded to Trump’s change in tone — during which he said he won’t play “hardball” with Xi — by suggesting it is open to a deal but would not back down from a fight if necessary.
“China’s attitude towards the tariff war launched by the U.S. is quite clear: We don’t want to fight, but we are not afraid of it. If we fight, we will fight to the end; if we talk, the door is wide open,” foreign ministry spokesperson Guo Jiakun said on Wednesday, according to the Wall Street Journal.
China had already levied retaliatory tariffs on American goods, which created a tit-for-tat in the escalating trade war.
Beijing wants the president to continue to gear more towards dialogue, calling for a tone down in rhetoric even after Trump’s comments on Tuesday.
“If the U.S. really wants to resolve the issue through dialogue and negotiation, it should stop making threats and coercions and engage in dialogue with China on the basis of equality, respect and mutual benefit,” Guo said.
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