US President Donald Trump has said that the very high taxes on goods coming from China will be reduced, but not completely removed. This is a change in his earlier stand in the trade fight between the US and China.

Speaking at the White House on Tuesday, Trump said, “145% is very high, and it won’t be that high. It won’t be anywhere near that high. It’ll come down substantially. But it won’t be zero.”

This is the first time Trump has suggested lowering the high tariffs after weeks of increasing them in response to China’s trade actions.

How the US-China trade war started

Earlier this month, Trump increased tariffs (special taxes on imports) on Chinese goods up to 145%. In return, China raised tariffs on US goods to 120%.

Back on April 2, Trump had also announced new tariffs on many countries, between 10% and 50%, but then paused them for three months due to worries about the impact on the market.

Before Trump spoke, Treasury Secretary Scott Bessent said that these high tariffs are “unsustainable”, meaning they can’t continue for long. He said both the US and China agree that things can’t stay this way and that talks will be tough.

“China is going to be a slog in terms of the negotiations,” Bessent said. “Neither side thinks the status quo is sustainable.”

After Trump’s comments, the US stock market showed signs of hope. The S&P 500 index went up by 2.5%, showing that investors believe the trade war might cool down soon.

 

You might also be interested in - Biden refers to Xi as a "dictator" following the US-China Summit