US President Donald Trump has signaled a potential U-turn on his trade war with China, saying the high tariffs on Chinese goods will "come down substantially, but it won't be zero." Trump's remarks, made at a White House news event Tuesday, appear to mark a rhetorical climbdown after weeks of tough posturing and tit-for-tat retaliation that sent tariffs on China beyond a staggering 145%. "145% is very high and it won't be that high," Trump said in a question-and-answer session with reporters in the Oval Office. "It won't be anywhere near that high. It'll come down substantially. But it won't be zero." Trump made the comments when asked about Treasury Secretary Scott Bessent's remarks earlier in the day that the high tariff rates between the United States and China have effectively embargoed trade between the economies. Bessent said at a private investment conference hosted by JP Morgan Chase that the trade war with China is unsustainable and he expects the battle to de-escalate in the very near future, a person familiar with the matter confirmed to CNN. Instead of a hard break or complete decoupling between the United States and China, Bessent told investors that the goal is to have a rebalancing of trade, the source told CNN. That assessment gave a boost to a Wall Street rally that had taken shape earlier on Tuesday, with all three major US stock indexes hitting their highest levels of the day after Bessent's remarks were made public. Asian stocks also rose on Wednesday, with Hong Kong's Hang Seng Index leading the regional gains. It last traded 2.5% higher, while Japan's Nikkei 225 was up about 2% and South Korea's Kospi rose 1.5%. The world's two largest economies have slapped record tariffs on each other in a swiftly escalating fight that has roiled global markets, disrupted supply chains and stoked recession fears. So far, China has struck a defiant tone and refused to back down. Instead, it retaliated by raising tariffs on US goods to 125%, adding more American companies on its export control list and unreliable entity list, and restricting the export of critical minerals used in everything from iPhones to missile systems. Beijing also moved to exert pain on key US industries, restricting the number of Hollywood movies shown in the country and returning at least two Boeing jets intended for use by Chinese airlines to the US. Through it all, Trump has insisted that he has a "very good relationship" with Xi Jinping while waiting for the Chinese leader to reach out – and has told his team that the US will not make the first move, CNN reported earlier. Rather than calling Trump to negotiate tariffs, Xi has instead launched a diplomatic charm offensive with other trade partners to push back against US efforts to use the tariff war to isolate China economically. On Tuesday, Trump again expressed his hope for Xi to come to the negotiation table – and promised to "be very nice." Asked if the US was going to play hardball with China or Xi in order to make a deal, or if officials would mention the Covid-19 pandemic, Trump quickly responded: "No." "No, no, we're going to be very nice. They're going to be very nice, and we'll see what happens," the president added. "But ultimately, they have to make a deal, because otherwise they're not going to be able to deal in the United States, and we want them involved." "I think we're going to live together very happily and ideally work together, so I think it's going to work out very well," he said. For its part, China has left the door open for talks but insisted they must be on equal terms. A person familiar with the Chinese government's thinking told CNN last week that China is open to trade negotiations with the US but any talks should be based on "respect," as well as greater "consistency and reciprocity" from the Trump administration. Before Trump unveiled his "Liberation Day" tariffs on April 2, China had designated a point person for talks with the US, the source said, adding that Beijing was unclear about the right contact on the US side. Trump may want to be his own negotiator, but this isn't compatible with how China works, the source added. Referencing hawkish or even hostile views on China expressed by Trump's Cabinet members, the person said Trump's failure to reject such views suggested he condoned them despite his public assertions about respecting and liking Xi. Earlier this month, Beijing slammed US Vice President JD Vance for his comments about "Chinese peasants" in an interview that has drawn widespread ire and ridicule on China's internet. — CNN
