Wall Street sees second consecutive rally amid hopes of easing trade tensions between the world’s largest economies.
Addressing reporters at the White House on Wednesday, Trump mentioned the possibility of announcing new tariff rates for US trading partners, including China, in the coming weeks, pending the outcome of negotiations with these countries.
Trump stated that any decision is dependent on the actions of other countries, underscoring that the US, which has been “ripped off for years,” will benefit from potential agreements. If no deal is reached, tariffs will be implemented.
Trump expressed his positive relationship with Chinese President Xi Jinping, hoping for a mutually beneficial agreement. He added that in the absence of a deal, the US will set its own terms.
Responding to inquiries about ongoing talks with China, Trump affirmed that discussions are very much ongoing, with all parties eager to participate.
Trump’s comments coincide with a second day of rallies at Wall Street, reflecting hopes for a de-escalation in trade tensions between Washington and Beijing, the world’s two largest economies.
The S&P 500 benchmark closed 1.67% higher on Wednesday, with the tech-oriented Nasdaq Composite rising by 2.50%. This follows on previous day’s gains spurred by US Treasury Secretary Scott Besent’s remarks that a trade war with China is “unsustainable”.
According to Wednesday’s Wall Street Journal report, the Trump administration is considering reducing tariffs on Chinese goods by 50-60% to ease tensions, with the condition that Beijing reciprocally lowers its 125 tariffs on US products.
Trump previously acknowledged that the 145% tariff on China is “very high” and expressed that it will be “substantially” reduced at some point.
China has voiced its opposition to protectionist measures like tariffs, while expressing readiness to “fight to the end” if trade tensions escalate further, as stated by Foreign Ministry spokesperson Guo Jiakun.
“China does not seek a war, but we are not afraid of it. We will fight if we must,” Guo said, while inviting the US to talks based on equality, respect, and mutual benefit.
The ongoing US-China trade conflict has sparked concerns about a potential global economic downturn, prompting the International Monetary Fund to lower its 2025 growth forecast to 2.8% from an initial 3.3%.
On Wednesday, a group of 12 US states, including Arizona, Colorado, Connecticut, Illinois, and New York, filed a lawsuit challenging Trump’s authority to impose tariffs without congressional approval.
The lawsuit, filed at the US Court of International Trade in New York, argues that Trump’s actions have “upended the constitutional order” and brought “chaos to the American economy,” as stated by Arizona Attorney General Kris Mayes.
“Arizona cannot afford President Trump’s massive tax increase. Tariffs are a tax that will be passed on to Arizona consumers,” Mayes said.
