The Blubber

The Trump administration is open to reducing tariffs on Chinese imports depending on the outcome of discussions with Beijing, according to a source familiar with the matter. The source emphasized that any changes would not be made unilaterally.

The comments came in response to a Wall Street Journal report suggesting that the White House is weighing a reduction in tariffs on Chinese goods as a way to ease tensions. The report cited a White House official saying tariffs could be lowered from the current 145% to a range between 50% and 65%.

“We are going to have a fair deal with China,” President Trump told reporters on Wednesday, though he did not address the specific details in the Journal article. On Tuesday, he had also expressed optimism about the possibility of a tariff reduction agreement.

White House spokesperson Kush Desai said any reporting on tariff changes was “pure speculation” unless directly confirmed by Trump himself.

Despite the potential tariff reductions, the proposed levels would likely remain high enough to discourage substantial trade activity between the U.S. and China. German shipping company Hapag-Lloyd reported that 30% of its shipments from China to the U.S. have already been canceled.

China has responded with 125% tariffs on American goods and other retaliatory measures.

U.S. Treasury Secretary Scott Bessent acknowledged that both countries view the current tariff rates as unsustainable but said there is no set timeline for negotiations to begin. Talks between Washington and Beijing on addressing the fentanyl crisis have also yet to yield progress, according to sources.

U.S. markets rose following the Journal report, with the S&P 500 gaining around 3% in mid-morning trading as investor sentiment improved on Trump’s retreat from threats to remove Federal Reserve Chair Jerome Powell and his openness to a deal with China.

According to the Journal, discussions remain fluid, with multiple proposals under consideration. One idea resembles a plan floated by the House China Committee last year: imposing a 35% tariff on non-sensitive items and a minimum 100% tariff on strategic goods, with the levies phased in over five years.

Alongside the steep tariffs on China, Trump has implemented a blanket 10% tariff on all U.S. imports and raised duties on steel, aluminum, and automobiles. Targeted tariffs on dozens of other countries have been temporarily suspended until July 9, while additional levies on pharmaceuticals and semiconductors are also under consideration. These moves have rattled financial markets and stoked recession fears.

On Wednesday, the International Monetary Fund warned that the tariffs could slow global economic growth and lead to higher debt levels.