The Trump administration in the United States is considering reducing tariffs on Chinese imports to ease ongoing trade tensions between the two countries. A government source confirmed on Wednesday that the reduction in tariffs may happen as part of negotiations with China and would not be a unilateral decision. British news agency Reuters reported the news.
According to a Wall Street Journal report, as part of this plan, the current tariffs on Chinese goods—which stand at 145%—may be reduced to between 50% and 65%. However, President Donald Trump has not yet made a final decision.
Following this news, the U.S. stock market saw a significant rally. The S&P 500 index rose by 3.3% in mid-morning trading, reaching a two-week high. Investor confidence has returned since Trump’s positive remarks on Tuesday.
Trump told reporters, “In the agreement we’ll make with China, tariffs on their products will be substantially reduced.” However, he warned, “If they don’t agree to the deal, we’ll set our own terms.”
The Wall Street Journal also reported that the administration is considering a tiered tariff structure. This may be aligned with a proposal made last year by the House of Representatives’ China Committee. That proposal suggested a 35% tariff for goods not deemed a national security threat, and at least a 100% tariff for goods linked to U.S. strategic interests, to be implemented in phases over five years.
Since the start of Trump’s second term in January, tariffs on Chinese goods have increased, escalating trade tensions. Currently, both sides are trying to resolve the conflict through negotiations.
The White House declined to comment on Wednesday. However, sources say discussions are still in the early stages and multiple options are being considered.
Trade policy analysts believe that reducing tariffs could play a key role in improving U.S.-China relations. However, the main question is how China will respond.
Meanwhile, market confidence was also boosted after Trump backed away from threats to fire the Federal Reserve Chair. Economists believe that easing trade tensions could be a positive sign for the global economy.