The US Treasury Secretary acknowledges that the trade war with China is not "sustainable."

WashingtonAfter announcing tariffs of up to 245% on some Chinese products, and Beijing failing to yield to trade pressure, Washington is beginning to ease its grip. At JP Morgan, Bessent said that talks between the United States and China have formally begun.status quo be ​​sustainable."

In parallel, Beijing has also shown itself open to starting negotiations with Washington, but has warned that it would not continue with the talks if the threats from the White House continue. In parallel, this Wednesday the Wall Street Journal exclusively reported that US President Donald Trump is considering cutting current tariffs on China by up to half to de-escalate the trade war.

Although nothing is finalized yet, a senior White House official has stated in the US media that tariffs on China will likely be reduced to between 50% and 65%. The US president had already indicated his intention to reduce tariffs on Chinese imports and this Tuesday announced a shift in his aggressive trade policy.

Trump acknowledged from the Oval Office that the current tariffs on China—which in some cases reach 245%—"are very high." "They won't be that high," the president said, referring to a possible reduction in tariffs. "They will come down substantially, but they won't be zero. They used to be zero." Despite his statement that the United States had not previously imposed tariffs on China, his predecessor, former President Joe Biden, had already imposed tariffs on certain products, such as Chinese electric vehicles.

Less pressure on Powell

In his remarks to the press on Tuesday, Trump also asserted that he had no intention of firing Federal Reserve Chairman Jerome Powell, whom he has repeatedly pressured to lower interest rates. Days earlier, it had been leaked to the press that the president had, behind closed doors, floated the idea of removing Powell from his position. Despite alleviating concerns about this possibility, Trump again insisted that Powell must lower rates: "This is a perfect time to lower interest rates. If he doesn't do it, is that the end? No. It's not."

On Tuesday, markets responded favorably to Trump's remarks, both for his nuanced remarks on tariffs and for the clear change of stance regarding Powell. On Wednesday morning, Wall Street opened up as much as 4%: the Dow Jones Industrial Average rose 1.15%; The S&P 500 advanced 1.7%, and the Nasdaq was the fastest-growing index, up 2.6%. Still, Bessent's remarks, which denied the possibility of Trump unilaterally lifting tariffs on China, once again dampened market optimism, reducing the gain from 4% to 2%.

It's been three weeks since Trump set the global economy ablaze with his tariff plans. During this time, the president has repeatedly shifted gears, further destabilizing markets and making volatility the new reality for stock indices.

Corps travels to Washington

While the United States appears to be trying to back down from the trade war they themselves initiated with China—which has already warned that it does not intend to back down an inch in the face of its threats—Washington is also immersed in negotiations with other countries to reach an agreement amidst the announced 90-day partial truce.

Last week, European Trade Commissioner Maros Sefcovic visited Washington for the third time to try to reach an agreement with his counterparts before the deadline expires. For the moment, the United States is only applying a 10% tax to the European Union's products instead of the initial 20% that the president had announced. The Spanish Minister of Economy, Carlos Cuerpo also met with Bessent last week.While the Spaniard described the conversation as "useful" and said dialogue should continue in Washington, the American responded by urging Spain to reach the 2% defense spending target. This Thursday, Cuerpo will return to Washington to meet, this time with Commerce Secretary Howard Lutnick.