US president Donald Trump yesterday (22 April) said that the 145% tariffs imposed by his administration on China will “come down substantially” but warned that they “won’t be zero”.
A tit-for-tat trade war has erupted between the two economic superpowers since Trump announced his ‘reciprocal’ tariff regime in the spring. China has itself imposed 125% levies on US imports into the country.
However, Trump yesterday remarked that his administration will be “very nice” to China, following comments made earlier in the day by his treasury secretary, Scott Bessent, who suggested that “de-escalation” will happen, according to the Guardian.
“Neither side thinks the status quo is sustainable,” said Bessent, prompting Trump to say:
“We’re going to live together very happily and ideally work together.”
‘Have to do a deal’
Trump was speaking to reporters in the Oval Office after a brief swearing-in ceremony for the new chair of the Securities and Exchange Commission Paul Atkins, the Independent reports.
He said:
“Ultimately, they have to make a deal, because otherwise they're not going to be able to deal in the US, and we want them involved, but they have to, and other countries have to make a deal, and if they don't make a deal, we'll set the deal.”
Following Bessent’s remarks earlier in the day, the S&P 500 stock index rose 2.5%, though an ongoing spat between Jerome Powell, the chair of the Federal Reserve, and Trump is continuing to bring down the stock markets and value of the US dollar.
Chinese whispers
The Chinese government hasn’t, at the time of writing, responded to yesterday’s comments from Trump and Bessent, but Beijing is warning other nations from doing deals with the US that impact their trading ties with the Asian superpower.
A Chinese commerce ministry spokesperson, quoted by the BBC, said:
"China firmly opposes any party reaching a deal at the expense of China's interests. If this happens, China will never accept it and will resolutely take countermeasures".
The EU, for its part, has said that Trump’s tariffs won’t derail its current policies regarding China.
According to EuroNews, Brussels will continue to look at ways of “de-risking” its trade with China rather than “decoupling” from it.
"We have ongoing trade negotiations with our US counterparts," said Arianna Podestà, the European Commission's deputy spokesperson.
"It's a negotiation between two parties and the two parties are discussing what are the elements where a win-win outcome can be reached…. This is distinct from our relation with China."
Reeves negotiates
The UK’s chancellor, Rachel Reeves, is in Washington DC this week for talks with Bessent.
Politico reports that British officials are “prioritising efforts to negotiate down the 25% tariffs on cars, steel and aluminum, and looming duties on pharmaceuticals”.
The UK could consider a “rethink” of its digital services tax and enforcement of online safety regulation, as well as concessions on agricultural standards, in return.
Officials aren’t expecting a breakthrough this week though, according to Politico.
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