Wall Street rallies for second day on hopes of a de-escalation in trade tensions between world’s two largest economies.
United States President Donald Trump has reiterated his intention to lower his crippling tariffs on China, but insisted the timeline for any relief will depend on Beijing.
Speaking to reporters at the White House on Wednesday, Trump said he could announce new tariff rates on US trading partners, including China, over the next few weeks depending on the outcome of his administration’s negotiations with other countries.
“That depends on them. We have a situation where we have a very, very great place. It’s called the United States of America, and it’s been ripped off for years and years,” Trump said when asked how soon he could lower the 145 percent tariff he has imposed on most Chinese goods.
“In the end what I think is going to happen is we’re going to have great deals, and by the way if we don’t have a deal with a company or a country, we’re going to set the tariff.”
Trump said he got on “very well” with Chinese President Xi Jinping and he hoped to see the sides reach a deal.
“Otherwise we will set a price,” Trump said.
Asked earlier on Wednesday if his administration was “actively” negotiating with China, Trump said: “Actively. Everything is active. Everybody wants to be a part of what we’re doing.”
Trump’s comments came as Wall Street rallied for a second straight day on hopes that Washington and Beijing will deescalate tensions that have spiralled into an effective trade embargo between the world’s two largest economies.
The benchmark S&P 500 closed 1.67 percent higher on Wednesday, while the tech-heavy Nasdaq Composite finished up 2.50 percent, adding to gains the previous day spurred by US Treasury Scott Bessent’s comments that a trade with China was “unsustainable.”
On Wednesday, the Wall Street Journal reported that the Trump administration was considering slashing tariffs on Chinese goods by 50-60 percent in a bid to lower tensions.
The report, which cited people familiar with the matter, said that Trump was considering a number of options for easing the duties but would expect to see Beijing lower its 125 tariffs on US goods in return.
On Tuesday, Trump publicly acknowledged that his 145 percent tariff on China was “very high” and said the rate would “come down substantially” at some point.
China has said it opposes protectionist measures such as tariffs, but that it is prepared to “fight to the end” if the US continues to escalate its trade salvoes.
“We have made it very clear that China does not look for a war, but neither are we afraid of it. We will fight, if fight we must,” Chinese Foreign Ministry spokesperson Guo Jiakun said during a regular media briefing on Wednesday.
“Our doors are open, if the US wants to talk. If a negotiated solution is truly what the U.S. wants, it should stop threatening and blackmailing China and seek dialogue based on equality, respect and mutual benefit.”
The US-China trade war has raised fears of a global economic slowdown, with the International Monetary Fund earlier this week slashing its 2025 growth forecast from 3.3 percent to 2.8 percent.
On Wednesday, a group of 12 US states, including Arizona, Colorado, Connecticut, Illinois, and New York and Vermont, filed a lawsuit challenging Trump’s authority to impose the tariffs without the approval of the US Congress.
In the suit filed in the US Court of International Trade in New York, the states said that Trump had “upended the constitutional order and brought chaos to the American economy.”
“President Trump’s insane tariff scheme is not only economically reckless – it is illegal,” Arizona Attorney General Kris Mayes said in a statement.
“Arizona cannot afford President Trump’s massive tax increase. No matter what the White House claims, tariffs are a tax that will be passed on to Arizona consumers.”