President Donald Trump has surprised markets and foreign governments by hinting that the United States may reduce its steep tariffs on Chinese imports. In a week filled with economic uncertainty and diplomatic tension, Trump’s remarks mark a noticeable change in tone from the aggressive trade stance he has held since returning to office. Although no formal decisions have been made, the message was clear: the current level of tariffs may not last.

Trump: Tariffs Will “Come Down Substantially”

Speaking from the Oval Office on Tuesday, President Trump responded to a reporter’s question about the current 145 percent tariff rate on Chinese goods. “One hundred forty-five percent is very high and it won’t be that high,” Trump said. “It won’t be anywhere near that high. It’ll come down substantially. But it won’t be zero.”

This statement was the first public indication that the administration may be reconsidering its hardline approach. Trump’s words echoed growing concerns within his own administration and among financial experts that the trade war has reached an unsustainable level. While insisting he still wants China to “make a deal,” Trump said he hoped to have a more cooperative relationship with Chinese President Xi Jinping.

“I think we’re going to live together very happily and ideally work together,” Trump said. “So I think it’s going to work out very well.”

Bessent: Tariff War Not Sustainable

Earlier the same day, Treasury Secretary Scott Bessent gave a blunt assessment at a private investment conference hosted by JPMorgan Chase. According to a source familiar with the event, Bessent told investors that the trade conflict had effectively “embargoed” commerce between the two economies.

“This is the equivalent of an embargo,” Bessent said, as later reported by Bloomberg News. “The current tariff levels aren’t sustainable.” He also suggested that a de-escalation could be coming soon, raising hopes among investors that the administration was prepared to shift course.

Following Bessent’s comments, U.S. stock markets surged, with the S&P 500 and Dow Jones Industrial Average both rising sharply. The rally spread to Asia, where the Hang Seng Index in Hong Kong rose more than 2 percent. Japan’s Nikkei 225 climbed 2 percent as well, and South Korea’s Kospi gained 1.5 percent.

White House Explores Tiered Tariff Strategy

While the president has not officially announced a change in policy, White House insiders have confirmed that several options are being discussed. According to a report by The Wall Street Journal, the administration is considering cutting tariffs on some Chinese imports by more than half.

One idea under review is a tiered structure that would distinguish between strategic and non-strategic goods. Products not considered a national security concern could face tariffs of around 35 percent. More sensitive goods, such as electronics or defense-related materials, could remain under much higher tariffs, possibly exceeding 100 percent.

A senior White House official explained, “The president has been clear: China needs to make a deal with the United States. When decisions on tariffs are made, they will come directly from him. Anything else is just pure speculation.”

China Calls for Respect and Reciprocity

China responded cautiously but firmly. At a regular press conference, Chinese Foreign Ministry spokesperson Guo Jiakun said, “The United States should stop its threats and coercion, and engage with China on the basis of equality, mutual respect, and reciprocity.”

Guo continued, “Claiming it wants to reach an agreement with China while constantly applying maximum pressure is not the right way to engage with China—and it simply won’t work.”

Despite the tension, China’s leadership has not ruled out negotiations. “If it’s to fight, we’ll fight till the end. If it’s to talk, our door is wide open,” Guo added.

Some Chinese officials, speaking to CNN on background, said that Trump’s latest remarks were interpreted in Beijing as a possible sign of weakness. The hashtag “Trump chickened out” quickly trended on Chinese social media platform Weibo, drawing over 150 million views.

Complications and Missed Connections

Although Trump has indicated that he is ready to talk, the channels of communication remain uncertain. A source close to Chinese policy circles told CNN that prior to Trump’s April 2 announcement of the “Liberation Day” tariffs, China had designated a point person for trade talks. However, Beijing was unsure who to contact in the U.S. government, given Trump’s tendency to centralize negotiations around himself.

The source added, “Trump may want to be his own negotiator, but this isn’t compatible with how China works.”

Meanwhile, Chinese officials including Finance Minister Lan Fo’an and central bank governor Pan Gongsheng are in Washington for the spring meetings of the International Monetary Fund and the World Bank. So far, they have not scheduled meetings with any U.S. administration officials. That could change if the White House signals it is ready to engage.

A Deal May Still Be Far Off

Even as both sides gesture toward possible negotiation, fundamental differences remain. On Thursday, China’s Commerce Ministry spokesperson He Yadong stated clearly, “The U.S. should thoroughly remove all unilateral tariffs if it really wants to solve the problem.” He dismissed recent reports of ongoing negotiations as “groundless.”

At the same time, Bessent made it clear that no unilateral offer had been made by the United States. “Trump hasn’t offered to take down tariffs on a unilateral basis,” he told reporters Wednesday.

The back-and-forth has led to confusion in financial markets. After an initial boost, stock futures dipped on Thursday morning, reflecting investor uncertainty about the direction of U.S.-China relations.

Strategic Pressure and Political Calculations

Some administration insiders believe that even a modest rollback in tariffs could relieve pressure on U.S. industries and global supply chains, while keeping the broader strategy of economic decoupling in place. “It would be kind of a pressure valve release without actually doing anything,” one advisor told The Wall Street Journal.

Despite the talk of a softer tone, Trump has continued to target other sectors with trade measures. He recently paused tariffs on some consumer electronics, is considering auto parts exemptions, and ordered a new investigation into foreign truck imports. The 10 percent baseline tariff announced in early April remains in effect.

The path ahead remains uncertain. But if Trump does reduce tariffs on Chinese goods, even partially, it could mark a significant shift in the most high-stakes trade conflict in the world today. Both governments appear to be testing each other’s limits, waiting to see who will take the next step. For now, the trade war continues—though possibly with a different tone.