President Donald Trump on Tuesday signaled a potential retreat from his administration’s aggressive trade stance against China, saying the steep 145% tariff rate currently imposed on Chinese imports “won’t be that high” for long.
His remarks, made in the Oval Office, added to mounting speculation that the U.S. is preparing to soften its position amid growing economic fallout and pressure from businesses hit by the escalating trade war.
Trump’s declaration came just hours after Treasury Secretary Scott Bessent privately admitted that the current U.S.-China trade impasse is “not sustainable.” Though Trump struck a hopeful tone about eventual negotiations, insisting “we’re going to be very nice,” there was no indication that formal talks have resumed. The White House later confirmed that there have been no direct communications between Trump and Chinese President Xi Jinping.
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Still, Trump said the current tariff rate “will come down substantially,” but not to zero — a level he claimed previously “destroyed” the U.S. economy.
The shift in tone did not go unnoticed by market watchers and analysts, who described it as a retreat under mounting pressure.
“Trump has just folded on Powell and China! Not going to fire Powell and China tariffs to come down substantially… This man is running a circus. This daily flip-flop is disgraceful and a joke,” said Puru Saxena, founder of Hong Kong-based investment research firm AlphaTarget, in a post on social media.
Trump’s softening posture has been interpreted as a signal of vulnerability, with several analysts arguing that China now holds the upper hand in any future negotiations. According to the South China Morning Post, advisers close to Chinese policymakers see the White House’s recent statements as a sign that the U.S. side is “folding.” That perception, experts suggest, could embolden Beijing to hold out for more favorable terms — or make fewer concessions altogether.
“[Trump] needs a quick deal,” Garcia-Herrero told the South China Morning Post. “China does not need to offer anything big in such circumstances, because the US is so desperate for a deal. With a few billion in imports from the US, China might manage to lower the tariffs. The deal might be sweeter for China than in 2019.”
One source familiar with Trump’s strategy said the White House is even willing to phase in tariffs over five years — a dramatic shift from the abrupt enforcement deadlines that defined earlier rounds of tariffs. Another possible concession, the source said, includes coordinating future tariffs with negotiations, rather than slapping them on unilaterally.
But while Trump confirmed he’s open to dialing back tariffs, he remained adamant that duties on Chinese goods would not be entirely lifted. “It won’t be zero,” he said.
Analysts say the policy shift is being driven not by diplomacy but by economic headwinds. Since Trump announced the universal tariffs earlier this month, industry data shows that ocean container bookings from China to the U.S. have plummeted more than 60% industry-wide — a direct hit to U.S. supply chains. The downturn is affecting everything from electronics and household goods to raw materials critical to American manufacturers.
“There’s a real squeeze happening here,” said Chen Zhiwu, a finance professor at the University of Hong Kong. “The more he talks like this, the more it shows how anxious the U.S. side is.”
According to Chen, China sees little incentive to rush back to the table and might benefit from prolonging the standoff, especially as the yuan gains popularity in regional trade.
Trump’s calls for cooperation come as China continues to demand that the U.S. drop what it calls “threats and coercion.” Beijing has also stepped up its own diplomacy, reportedly engaging U.S. allies like Japan to build opposition against Trump’s tariff plan, a move seen as undermining Washington’s leverage.
Despite the political theater, Trump remains without a clear path to securing a deal. Talks have not resumed, and China has yet to formally respond to U.S. overtures. Instead, Beijing has stuck to its retaliatory tariffs, now totaling 125% on U.S. exports, while exempting select industries such as semiconductors and medical devices in a bid to contain the domestic impact.
Even U.S. officials appear to be hedging expectations. Bessent, speaking Tuesday to investors, warned that the negotiations with China would likely be a “slog,” and that while a de-escalation is expected, the process will be neither fast nor simple.
In Beijing, Foreign Ministry spokesperson Guo Jiakun reiterated China’s stance that the U.S. must “stop making threats and resorting to coercion” if it wants a path to dialogue. Until then, analysts believe China is content to wait out the storm.
“Rising living costs, economic disarray, and popular discontent will eventually force a definite pivot of Trump’s approach,” said Xu Tianchen, a senior China economist. “China is betting that time is on its side.”
With the U.S. economy showing signs of strain and businesses warning of disruptions, Trump’s shift from hardline rhetoric to cautious optimism may not be the final act, but it’s certainly a curtain-raiser for a more complicated phase of the trade war.