President Donald Trump has indicated a major shift in tone towards Beijing, suggesting that US tariffs on Chinese imports could be reduced “substantially” if a trade agreement can be brokered between the world’s two largest economies. This softer stance marks a notable departure from the White House’s earlier combative rhetoric, amid escalating pressure from financial markets and business groups.
“It will come down substantially but it won’t be zero,” Trump said on Tuesday in Washington, hinting at a willingness to compromise. “We’re going to be very nice and they’re going to be very nice, and we’ll see what happens,” he added, signalling an intention to de-escalate tensions that have unsettled global investors.
The President’s remarks followed those of Treasury Secretary Scott Bessent, who earlier in the day warned that the prolonged trade standoff was “unsustainable” and called for renewed dialogue. Bessent, speaking at a closed-door investor summit, said the US and China would need to “find ways to de-escalate” and acknowledged that “decoupling” was not a viable strategic goal.
Trump also clarified that he had no plans to raise Covid-19 origins during upcoming discussions with Chinese President Xi Jinping, calling it a “politically sensitive” issue for Beijing. This comes after the White House launched a controversial website implying the virus originated from a lab in China—a move that sparked outrage among Chinese diplomats.
Meanwhile, markets appeared to welcome the shift in tone. The Hang Seng China Enterprises Index in Hong Kong climbed 2.1 per cent on optimism that relations between the two powers might improve. The offshore yuan also strengthened to 7.2994 against the US dollar, reflecting investor confidence in a possible thaw in trade tensions.
Back in the US, Trump is under mounting pressure to stabilise markets, which have endured sharp swings since his administration implemented sweeping 145 per cent tariffs on Chinese goods at the start of April. While exemptions were granted for computers and consumer electronics, the broader trade environment remains fraught.
“Trump is panicking due to the markets plummeting and still very high US Treasury yields,” said Alicia Garcia Herrero, chief Asia Pacific economist at Natixis. “He needs a deal and quick. China does not need to offer anything big in such circumstances.”
Indeed, Chinese state-affiliated media outlet Cailian described Trump’s comments as “a sign that he is already softening his stance.” On China’s Weibo social media platform, the phrase “Trump chickening out” was among the top trending topics on Wednesday, underlining the scepticism among Chinese netizens.
Beijing, for its part, has so far withheld an official response. However, it has previously demanded a more respectful tone from US officials before it agrees to come to the negotiating table. Notably, it was Vice President JD Vance’s recent disparaging remarks about Chinese “peasants” that drew fierce backlash, with one diplomat labelling them “ignorant and disrespectful.”
In what may be a preparatory move, China has dispatched key economic officials to Washington for the World Bank and IMF meetings this week. The delegation includes People’s Bank of China Governor Pan Gongsheng, Deputy Governor Xuan Changneng, and Finance Minister Lan Fo’an. Observers believe this could provide an opportunity for informal trade-related dialogue between the two sides.
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Moreover, China last week appointed Li Chenggang as vice commerce minister and lead trade envoy—a signal, experts say, that Beijing is preparing for renewed talks.
“China is ready to talk,” said Henry Wang Huiyao, founder of the Beijing-based Center for China and Globalization. “Trump’s comments show a more reasonable tone. This could usher in a stabilising, cooling period and allow both sides to restore normal relations.”
Despite Trump’s conciliatory language, Treasury Secretary Bessent cautioned that a comprehensive agreement could take up to two to three years to materialise, as both sides would need to address long-standing imbalances in trade and economic policy.
Still, for now, markets and policymakers appear cautiously optimistic that the rhetoric is shifting, and a window for constructive dialogue may be opening.
