President Trump said Monday he expects China to “follow through” and agree to a full trade deal that opens their markets to U.S. producers during a negotiated pause in sky-high tariffs.
The president said tariffs on Chinese tariffs would rise again if negotiators cannot reach a favorable agreement during a 90-day pause in a trade war that both sides view as unsustainable.
But, he said, “I think they’re going to follow through. I think they want it very badly.”
Wall Street opened Monday with a huge rally following weekend talks in Switzerland that resulted in the agreement to slash tariffs and pursue a broader agreement that fosters trade between the world’s largest economies.
Under the deal, China agreed to reduce its tariff on U.S. goods from 125% to 10%, and the U.S. agreed to slash its levy on China from 145% to 30%.
The higher U.S.-imposed levy is due to a previous, 20% tariff Mr. Trump put on Chinese goods because of the fentanyl crisis.
“The biggest thing to me is the opening up [of China] — I think it would be fantastic for our businesses if we could go in and compete,” Mr. Trump said at the White House.
Mr. Trump said he would raise tariffs again if the two sides cannot reach a deal but they wouldn’t reach 145%.
“They would go up substantially higher,” he said. “At 145 [percent], you’re really decoupling, because no one’s going to buy.”
However, he said, “I think there will be a deal.”
“I think it’s going to be fantastic for China, I think it’s going to be great for us, and I think it’s going to be great for unification and peace,” Mr. Trump said. “We have to get it papered, but they’ve agreed to open up China.”
Washington and Beijing were locked in a bitter trade war after Mr. Trump unveiled an April 2 “Liberation Day” plan that imposed hefty tariffs on countries that sell products to U.S. consumers but don’t buy nearly as much from American producers.
China retaliated, resulting in sky-high tariffs that neither side viewed as sustainable.
The standoff caused factory output in China to slow, while U.S. retailers warned of empty shelves of higher prices as they passed along the added costs from tariffs.
Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer met with Chinese Vice Premier He Lifeng in Geneva over the weekend to de-escalate the fight and commit to further talks over trade.
The countries released a joint statement saying both sides recognize “the importance of a sustainable, long-term, and mutually beneficial economic and trade relationship,” and set up a mechanism for future talks between them.
Mr. Trump called it a “total reset with China” while negotiators deal with “larger structural” issues regarding trade between the countries.
“The relationship is very good,” the president said Monday. “We’re not looking to hurt China.”
Mr. Trump also predicted he would speak to Chinese President Xi Jinping before the end of the week.
For China, Mr. He said the two sides “have taken important steps to resolve differences through equal dialogue and consultation,” according to state news agency Xinhua.
Tariffs are a tax or duty paid by importers on the goods they bring in from foreign markets.
Mr. Trump says tariffs are a great way to force companies to return to America or keep their operations in the U.S., employ American workers and create revenue to fund domestic programs.
Foreign countries don’t pay the tariffs directly to the U.S. Treasury. In many cases, U.S. companies will pay the levies, and they might pass on at least some of the cost to consumers through higher prices.
U.S. retailers on Monday reacted with relief to progress over the weekend.
“This temporary pause is a critical first step to provide some short-term relief for retailers and other businesses that are in the midst of ordering merchandise for the winter holiday season,” said Matthew Shay, president and CEO of the National Retail Federation. “And over the long term, this lays the foundation for substantial progress in achieving truly fair and balanced trade relationships with both China and our other trade partners around the world.”
