President Donald Trump has announced that the United States will “substantially” reduce tariffs on Chinese imports, in a move that could mark a shift in the long-running trade conflict between the world’s two largest economies.
Speaking on April 22, Trump said that although the tariffs would be lowered significantly, they “won’t be zero”, indicating a continued effort to protect certain domestic industries.
Currently, the US imposes tariffs of up to 145 percent on Chinese goods – levels that some within the administration have acknowledged are economically unsustainable.
Treasury Secretary Scott Bessent described the situation as akin to a “trade embargo”, noting the severe constraints it has placed on bilateral commerce.
He said the administration is considering options to de-escalate the trade war, which began escalating again in early 2025 when the US imposed a new 10 percent tariff on Chinese goods in response to concerns over drug trafficking.
China retaliated with a 125 percent tariff on American products. However, it has since said the door to trade negotiations with the US is “wide open”.
The economic toll of the conflict has been mounting. The International Monetary Fund recently warned that the tariff standoff could lead to a “major negative shock” to the global economy, prompting it to revise down its global GDP forecasts.
Financial markets responded favorably to Trump’s announcement. US stock indexes surged, with the S&P 500 rising 2.7 percent, the Dow Jones Industrial Average jumping by 877 points (2.2 percent), and the Nasdaq gaining 3.5 percent.
Analysts attributed the rally to renewed investor optimism over easing trade tensions.
Despite the positive market response, details surrounding the scale and timeline of the tariff reductions remain unclear. Trump did not confirm whether formal talks are under way with Beijing.
Meanwhile, Chinese President Xi Jinping criticized the tariffs, arguing that they “undermine the legitimate rights and interests of all countries” and disrupt the global economic order.
As businesses and governments around the world await further clarification, the announcement has renewed speculation over whether the US and China could be entering a new phase of trade relations – or simply pausing a prolonged standoff.
