US President Donald Trump could reduce the heavy tariffs on Chinese goods, a policy that has defined his administration’s trade war with China. During a press event held in the Oval Office on Tuesday, Trump stated that tariffs on Chinese goods “will not be as high as 145%” and “will come down substantially,” but not be eliminated entirely.
According to the president, top Chinese officials are communicating with American representatives, and he believes they will reach an agreement soon. Yet, some economists argue Trump’s public optimism masks a lack of real progress behind closed doors.
A US-China agreement looks possible, but it seems difficult
Tit-for-tat tariff hikes between Beijing and Washington, 125% for the former and 145% for the latter, threaten to stifle bilateral trade between the two nations, which reached $688.3 billion in 2024. Trump insists that he needs to bring America’s trade deficit with China down, even at the expense of cutting supply chains.
Chen Zhiwu, professor of finance at the University of Hong Kong, dubbed Trump’s remarks a facade intended to show the world he is in control.
“There hasn’t been any substantial progress in US-China tariff negotiations,” he asserted. “The more he talks like this, the more it shows how anxious the US side is. Trump and his team are under pressure, but China isn’t showing any signs of impatience.”
President Trump might have insinuated this, but some sources in Washington claim negotiations have not officially resumed. US Treasury Secretary Scott Bessent, speaking on Monday’s sidelines of the IMF and World Bank spring meetings, revealed that discussions with China had not yet begun. However, he said a deal remained possible.
China is ready to talk, but leaves no room for exploitation
The Trump administration has opened its door for discussions, but Chinese leadership, particularly President Xi Jinping, is in no rush to engage. According to the South China Morning Post, Xi has declined calls from Trump and is launching an outreach campaign with other global trade partners to counterbalance the US’s economic weight.
Trump, however, is convinced that his relationship with Xi is strong. “We’re going to be very nice. They’re going to be very nice, and we’ll see what happens,” he said Tuesday. The POTUS believes China would eventually need to make a deal “because otherwise they’re not going to be able to deal in the United States.”
Alicia Garcia-Herrero, Asia-Pacific chief economist at Natixis, said Trump has realized the US could struggle economically if he does not attempt to mend relationships with Beijing.
“Trump appears to be panicking, He needs a quick deal. China does not need to offer anything big in such circumstances, because the US is so desperate,” she propounded.
Professor Chen added that China has little incentive to accelerate talks. “From China’s side, I think they’ll just wait. The more Trump shows his anxiety, the more it tells China there’s no need to panic.”
Global economic trade war fallout
In other news, the International Monetary Fund revised its growth forecasts Monday, taking the predictions downwards purportedly because of the standoff between America and China.
Xu Tianchen, a senior economist with the Economist Intelligence Unit, said the situation remains “pretty fluid.” Xu claims there must be more visible signs of domestic economic decline for any positive change to occur. “Rising living costs, economic disarray, and popular discontent will eventually force a definite pivot of Trump’s approach,” he concluded.
Some analysts suggest Beijing may already be using those holdings as leverage.
“I think China is actually weaponizing its Treasury portfolio,” surmised Chen Zhao, chief global strategist at Alpine Macro. “They’ve been selling US Treasurys and reallocating the funds into euros or German bunds. That’s entirely consistent with market movements we’ve observed in recent weeks.”
Still, not everyone agrees that China can unload US debt without consequences of its own.
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