AsianFin -- The Trump administration may consider tariff cuts to ease U.S.-China trade tensions even though it hasn’t started any trade talks with the world’s second largest economy yet.
Credit：Xinhua News Agency
White House is discussing slashing tariffs on Chinese imports, in some cases by more than half of the current level, as part of efforts to seek de-escalation of the U.S.-China trade war, the Wall Street Journal reported on Wednesday. There are several options on the table as U.S. President Donald Trump hasn’t made final decision, per the report.
The report cited a senior U.S. government official that China tariffs could be lower to between 50% and 65%, compared with a total of 145% tariffs on China since Trump returned to the White House in January. One of options the Trump administration is reportedly considering is the layered tariffs, namely, 35% levies for Chinese imports the U.S. doesn’t deem as a threat to its national security, and at least 100% for items labeled as strategic to the country’s interest.
A U.S. official said Trump would not act unilaterally and suggested he would not lower tariffs unless he sees China takes some action, according to the report.
The report came on heels of Trump’s remarks about possible substantial China tariffs cuts through talks. The tariff levels “won’t be anywhere near that high,” Trump said in the Oval Office on Tuesday. “It will come down substantially but it won’t be zero.” The president replied "we're going to be very nice, they're going to be very nice, and we'll see what happens" when asked whether he planned to play "hardball" with Beijing and bring up with origins of the COVID-19 virus.
"But ultimately," Trump added, "they have to make a deal because otherwise they're not going to be able to deal in the United States. So we want them involved, but they have to ‒ and other countries have to ‒ make a deal, and if they don't make a deal, we'll set the deal."
U.S. Treasury Secretary Scott Bessent earlier Tuesday claimed the trade war between the world’s top two economies will de-escalate.
The tariff standoff with China is unsustainable and is expected to de-escalate, Bloomberg reported, citing Bessent in a speech at a close-door investor summit for JPMorgan Chase & Co. in Washington. Bessent was reported to claim a deal between U.S. and China is possible, though talks haven’t formally started yet.
A CNBC source echoed the publication, stating Bessent told investors that he expects “there will be a de-escalation” in U.S.-China trade war in “the very near future.” “No one thinks the current status is sustainable” with the tariff rates at their current levels, according to the CNBC source, which is a person in the summit room.
China on Wednesday called for dialogue for mutual benefits and stressed it would not cave to any pressure or threat. If the U.S. side truly wishes to solve tariff-related issues with China through dialogue and negotiation, it must stop threatening and extorting, and conduct the dialogue on the basis of equality, respect and mutual benefits, Chinese Foreign Ministry spokesperson Guo Jiakun commented on Trump and Bessent’s remarks.
Guo reiterated Beijing’s stance that China has long pointed out that there are no winners in tariff and trade wars, protectionism has no way out, and decoupling and breaking the industrial chain will only lead to self-isolation.
"Regarding the tariff war launched by the United States, China's attitude is very clear: We are unwilling to fight it and are not afraid of doing so," Guo cautioned.
If the United States is determined to fight a tariff and trade war, China's response will continue to the end. If it really wishes to solve tariff-related issues through dialogue and negotiation, China also leaves the door open for talks, Guo said.
The spokesperson said the United States cannot wish to reach an agreement while constantly engaging in extreme pressure on China. "That is not the correct way to deal with China, and is doomed to fail," he said.
