Trump Signals Major China Tariff Reduction After UK Deal Success

President Donald Trump suggested on Friday that his administration is considering a significant reduction in tariffs on Chinese goods, just one day after securing a breakthrough trade agreement with the United Kingdom. The potential shift represents a major policy reversal in the escalating trade war that has rattled global markets since April.

In a post on Truth Social, Trump wrote: “80% Tariff on China seems right! Up to Scott B,” referring to Treasury Secretary Scott Bessent. This would mark a substantial decrease from the current 145% rate imposed on most Chinese imports.

Trade Negotiations Accelerate Following UK Deal

The timing of Trump’s announcement follows Thursday’s successful trade agreement with the United Kingdom, which was widely celebrated as the administration’s first major trade victory. According to Yahoo Finance, sources familiar with the matter indicate U.S. negotiators are targeting even steeper cuts – potentially below 60% – in hopes of securing matching reductions from Beijing.

The UK deal, which maintained a 10% baseline tariff while reducing duties on British vehicles from 25% to 10%, has apparently emboldened the administration to pursue similar arrangements with other trading partners, particularly China. The successful negotiation appears to have provided a template for how the administration plans to approach future trade agreements.

“We will have many trade deals announced over the next several weeks,” Trump said during the signing ceremony with British Prime Minister Keir Starmer. “We have many in the hopper right now.”

Economic Impact of the Trade War

The aggressive tariff policy implemented by Trump since early April has caused significant disruption to global supply chains and American businesses. According to CNBC, U.S. exports have plummeted across nearly all sectors, with agricultural products hit particularly hard.

Kyle Henderson, CEO of trade tracking firm Vizion, described the import collapse as unprecedented since the pandemic disruptions of 2020, noting: “We haven’t seen anything like this since the disruptions of summer 2020. That means goods expected to arrive in the next six to eight weeks simply won’t.”

The impact has been especially severe for American farmers, with data from the U.S. Department of Agriculture showing that exports of soybeans – the largest U.S. farm export – dropped by 50% in mid-April compared to the previous week, driven largely by a 67% fall in shipments to China.

Chinese Response and Global Implications

Beijing has maintained a cautious public stance while signaling openness to negotiations. Chinese officials have consistently stated that while they “do not want to fight,” they are prepared to “fight to the end” if necessary, according to Al Jazeera.

Recent reports from Chinese state media suggest Washington has “proactively reached out to China through multiple channels” to discuss the tariff situation. Treasury Secretary Bessent indicated on Fox Business that any significant trade deal would require both sides to first “de-escalate” the high tariff rates (145% on the U.S. side and 125% on the Chinese side).

“I am confident that the Chinese will want to reach a deal. And as I said, this is going to be a multi-step process,” Bessent said. “First, we need to de-escalate, and then over time, we will start focusing on a larger trade deal.”

Market Response and Business Reactions

Financial markets have responded positively to signs of potential de-escalation. The Dow Jones Industrial Average rose over 500 points following the UK trade announcement, with additional gains after Trump’s comments on China tariffs. Stocks of companies with significant exposure to Chinese manufacturing, including major retailers and technology firms, saw particularly strong performance.

However, many American businesses remain cautious. The sudden policy shifts have created significant uncertainty for companies with global supply chains. Many retailers have urged consumers to purchase products sooner rather than later, anticipating price increases and potential shortages in the coming months.

Walmart and Target reportedly warned the administration that shoppers could see empty shelves and higher prices from June onward if the high tariff rates remain in place, with potential supply shocks extending into the holiday shopping season.

Political Implications

The apparent pivot toward negotiation comes as polls show increasing domestic concern about the economic impact of the trade war. A recent Economist-YouGov survey found Americans reporting that Trump’s economic actions have hurt them personally more than they’ve helped by a 30-point margin.

Senator Adam Schiff (D-Calif.) has called for investigations into potential insider trading related to the administration’s tariff announcements, citing Trump’s public statement just hours before lowering tariff rates in April: “THIS IS A GREAT TIME TO BUY!!! DJT.”

While critics argue the administration’s approach has been chaotic and unnecessarily disruptive, supporters maintain that the aggressive initial stance was necessary to achieve more favorable trade terms for American workers and businesses.