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Concealed Republican > Blog > Politics > NEW: Trump May Cut China Tariffs to Kick-Start Trade Talks
Politics

NEW: Trump May Cut China Tariffs to Kick-Start Trade Talks

Jim Taft
Last updated: April 23, 2025 2:48 pm
By Jim Taft 6 Min Read
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NEW: Trump May Cut China Tariffs to Kick-Start Trade Talks
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Is this a blink? Or is it a nudge?

Since Liberation Day, the White House has spent considerable effort recalibrating its tariff rates and applications as the markets responded — largely and significantly negatively. Donald Trump has hit China particularly hard, and after the first few days of the tariff rollout, appeared to make China his primary target for tariffs. Talks with other trading partners immediately opened up and reportedly focused on using tariffs as part of a strategy to isolate Beijing.

Today, however, the Wall Street Journal reports that Trump is considering de-escalation reductions with China, reportedly to boost the prospects for trade talks:

The Trump administration is considering slashing its steep tariffs on Chinese imports—in some cases by more than half—in a bid to de-escalate tensions with Beijing that have roiled global trade and investment, according to people familiar with the matter.

President Trump hasn’t made a final determination, the people said, adding that the discussions remain fluid and several options are on the table.

One senior White House official said the China tariffs were likely to come down to between roughly 50% and 65%. The administration is also considering a tiered approach similar to the one proposed by the House committee on China late last year: 35% levies for items the U.S. deems not a threat to national security, and at least 100% for items deemed as strategic to America’s interest, some of the people said. The bill proposed phasing in those levies over five years.

Yesterday, Trump did tell reporters that the current 145% tariff rate was “very high,” and would not be as high once talks conclude:

In the Oval Office on Tuesday, the president also said 145% tariffs on China are “very high.”

“It won’t be that high,” Trump said. “It will come down substantially. But it won’t be zero. It used to be zero.”

That still seemed to be predicated on trade talks with that rate in place. Now it seems that Trump will back down on the rates first. Why? Earlier today, China signaled that it would engage with Trump on trade, but not under “continued threats from the White House,” as the WSJ puts it. If that’s the case, then this leak might be a strategic signal to Xi Jinping that we can make a gesture to allow him to save face before entering into talks.

Scott Bessent sent another, more direct signal:

“There is an opportunity for a big deal here,” between the U.S. and China, Treasury Secretary Scott Bessent said.

The U.S. needs to rebalance to more manufacturing and exports and away from consumption while China needs to rebalance in just the opposite direction, he told the Institute for International Finance. “Let’s do it together,” he said. “This is an incredible opportunity.”

That’s all well and good, but then that complicates the idea that this has been a grand strategy to isolate China. That will impact the talks with our other trading partners, at least by draining some of the leverage out of the negotiations. This looks more like an effort to shore up the markets and support from key constituencies. It seems to be working so far this morning:

Investors are breathing a sigh of relief—and putting the “Sell America” trade on pause.

A rally in U.S. stocks continued for a second day, after the Trump administration addressed two of the market’s biggest concerns by softening its tone on both China and the Federal Reserve.

Still, that doesn’t negate the impression that the White House seems to be making this up on the fly rather than pursuing a coherent strategy that will reconstruct free trade into truly fair trade. In one indicator that leverage may be waning, the EU has now announced that it would not negotiate its VAT policies that disfavor American exports:

The European Union won’t negotiate changes to its value-added taxes or agricultural subsidies as part of trade discussions with the U.S., the bloc’s economy commissioner said early Wednesday.

“We do not see any possibility to move away from our value-added tax,” the EU’s Valdis Dombrovskis told The Wall Street Journal. He said he had communicated that to his counterpart, Treasury Secretary Scott Bessent, before Trump’s plans for reciprocal tariffs were unveiled.

There is still plenty of opportunity for successes, but the White House has to decide what it’s actually trying to do with its tariff policies — and stick to the plan. 

Read the full article here

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