President Donald Trump appeared to step back from the brink of a full-scale trade war with China on Wednesday, signaling a possible shift in tone and policy after weeks of escalating rhetoric and steep tariffs. Acknowledging that the newly imposed 145 percent duty on Chinese imports is “very high,” the president hinted at the possibility of striking a deal with Chinese President Xi Jinping — a move that could ease tensions in rattled U.S. financial markets.
“We’re dealing with a lot of countries right now and could be with China,” Trump told reporters. “But maybe we’ll make a special — you know, a deal — and we will see what it will be.”
The comments came just a day after Trump suggested the tariff rate on Chinese goods could “come down substantially,” raising hopes that the administration is reconsidering its aggressive approach. Despite his openness to negotiations, Trump offered no indication that the sweeping tariffs would be lifted soon — a position that continues to inject uncertainty into markets and global trade dynamics.
Behind the Shift: Market Volatility and Retailer Warnings
The shift in tone followed a week of high-level meetings and market turbulence. On Monday, Trump met with the CEOs of major U.S. retailers, including Walmart, Target, and Home Depot, who warned the president about the impact of high tariffs on consumer prices — especially during the upcoming holiday season.
“They emphasized that higher import duties would directly hit American families and dampen economic growth,” said one lobbyist familiar with the meeting.
Those concerns appeared to resonate with the president. Treasury Secretary Scott Bessent, who has taken the lead on trade talks, told investors Tuesday that he expects a “de-escalation” in tensions with China. The markets reacted positively to the news, with the Dow Jones Industrial Average jumping over 700 points at the open and closing with a gain of more than 400 points.
“President Trump’s decisions are guided solely by what’s best for the American people,” said White House spokesperson Kush Desai in a statement.
From Firebrands to Moderation: A Shift in Messaging
Insiders say the administration’s messaging on tariffs has been disjointed, with mixed signals coming from various officials. A source close to the White House described the communications strategy as “rudderless,” noting that the focus appears to have shifted from working-class Americans to calming Wall Street.
“Bessent is clearly the new center of gravity,” the source added, pointing out that power has shifted away from previous hardliners like Commerce Secretary Howard Lutnick and trade adviser Peter Navarro.
While the president continues to emphasize his “great relationship” with Xi, he also defended the tariffs as a long-overdue correction to what he sees as unfair trade practices.
“China has been charging us massive tariffs for years,” Trump said. “We’re going to get along great with China, I have no doubt about it.”
Markets Still on Edge
Despite the more conciliatory tone, volatility remains. Trump’s earlier attacks on Federal Reserve Chair Jerome Powell unsettled markets on Monday, though he quickly walked back those comments, stating he has “no intention” of firing Powell.
Bond markets have also shown signs of stress, with falling demand for U.S. Treasurys sparking concern among investors. A source close to the administration noted that “the stock market can recover, but deep systemic problems, like those reflected in the bond market, are harder to fix.”
The 90-Day Clock Ticks
In early April, Trump announced a 90-day pause on implementing additional reciprocal tariffs, giving negotiators time to strike deals with up to 90 countries. If those deals fail to materialize, the U.S. has said it will proceed with setting unilateral tariff rates.
White House Press Secretary Karoline Leavitt emphasized on Wednesday that there would be “no unilateral reduction in tariffs against China” without a formal agreement.
Meanwhile, China has signaled it is open to negotiations but remains firm. “If we fight, we will fight to the end; if we talk, the door is wide open,” said Chinese Foreign Ministry spokesperson Guo Jiakun. He added that talks must be based on “equality, respect, and mutual benefit.”
Beijing has already responded with retaliatory tariffs on U.S. goods, fueling a tit-for-tat escalation that has alarmed businesses and investors on both sides of the Pacific.
Outlook: Cautious Optimism with Many Unknowns
While Trump’s latest remarks offer a glimmer of hope for de-escalation, much remains uncertain. With global markets watching closely, and U.S. retailers and consumers bracing for potential fallout, the next few weeks will be crucial in determining whether diplomacy can prevail over economic confrontation.
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