President Donald Trump announced plans to significantly lower the current 145% tariff on Chinese imports, though he emphasized the rate “won’t be zero.” The move follows a meeting with major U.S. retailers and comes amid mounting economic pressure from the ongoing trade war, which has seen China retaliate with a 125% tariff on U.S. goods. While Trump claims active negotiations are underway, Chinese officials deny formal talks and demand the U.S. remove all unilateral tariffs. The prospect of tariff reductions sparked a 3% rally in the S&P 500, reflecting investor optimism for de-escalation. However, uncertainty remains over China’s response and the timeline for any agreement.
Key Takeaways:
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Trump signaled a substantial reduction of tariffs on Chinese imports, but not their elimination.
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China insists no formal negotiations are happening and calls for all U.S. tariffs to be lifted.
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Markets responded positively, but the outcome and timing of any deal remain unclear.
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