Trump Considers Slashing China Tariffs to 50% Amid Global Economic Concerns

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•  23 Apr 2025
 

Trump is reportedly considering a dramatic reduction in tariffs on Chinese imports, potentially cutting them from their current level of 145% down to a range between 50% and 65%. The move comes as part of a broader effort to ease trade tensions with China, the United States’ biggest economic rival. According to a report from The Wall Street Journal, any tariff rollback would not be unilateral—Washington expects Beijing to reciprocate with steps of its own. Trump told the press, “We’re going to reach a fair deal with China,” though he did not elaborate on the specifics. His comments followed earlier optimistic remarks suggesting a tariff deal may be possible in the near future.

While a reduction to 50%–65% would mark a significant shift from the aggressive 145% tariffs currently in place, those levels would still be high enough to impact trade between the two economic giants. The talks are fluid, and several options remain under review. One possibility includes a phased approach inspired by a prior proposal from the House China Committee, recommending a 35% tariff on non-sensitive imports and maintaining tariffs of at least 100% on items deemed strategic to U.S. national interests. That plan suggested implementing changes gradually over five years.

Markets responded positively to the reports, with U.S. stock indices rising up to 3%, led by a rally in the Nasdaq. Investor sentiment was lifted not only by easing tariff fears but also by Trump’s retreat from threats to dismiss the Federal Reserve Chair. His indication that a trade deal with China could be achieved further boosted investor optimism.

However, the International Monetary Fund issued a stark warning on Wednesday, cautioning that high tariffs risk slowing global economic growth and increasing sovereign debt levels. U.S. Treasury Secretary Scott Bassent criticized both the IMF and the World Bank for focusing too heavily on climate, gender, and social issues instead of their core economic roles. He maintained that there is a real opportunity for a significant trade agreement with China.

Meanwhile, global trade continues to feel the strain. German shipping giant Hapag-Lloyd reported that 30% of shipments bound for the U.S. from China have been canceled amid the trade uncertainty. China has retaliated with tariffs of up to 125% on U.S. imports and other countermeasures. Trump’s administration has also imposed a blanket 10% tariff on all imports into the U.S., along with higher rates on steel, aluminum, and autos. Targeted tariffs on sectors like pharmaceuticals and semiconductors are under consideration. While duties on dozens of countries have been temporarily suspended until July 9, further industry-specific tariffs are on the table.

As discussions continue, the global economic community is watching closely. A reduction in China tariffs to the 50% range would signal a major shift in U.S. trade policy. Whether this move leads to renewed cooperation or further tension will depend on how both nations proceed in the coming weeks.