China Opens Door to Trade Talks After Trump Hints at Tariff Reversal

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In a surprising shift, China has responded positively to signals from Washington that the United States may ease its hardline trade stance—potentially ending months of escalating tariffs and economic tension between the world’s two largest economies.

At the center of this development are comments made Tuesday by U.S. Treasury Secretary Scott Bessent, who told a closed-door investment conference in Washington that a U.S.-China trade deal may be “very near.” Bessent added that both sides understood “the status quo is unsustainable,” giving markets a jolt of optimism.

Later that day, President Donald Trump reinforced the sentiment, suggesting that the current 145% blanket tariff on Chinese imports could be “substantially” reduced. This marked a significant rhetorical pivot from the administration’s previously aggressive tariff strategy.

The reaction was swift. Global markets rallied, with the S&P 500 jumping 2.5% and Asian markets climbing higher in Wednesday trading. Investors, long wary of the knock-on effects of prolonged trade disruption, welcomed the prospect of de-escalation.

Beijing Responds: "Our Door Is Wide Open"

At a press briefing in Beijing, Chinese Foreign Ministry spokesman Guo Jiakun reiterated China's longstanding position that “there are no winners in a trade war.” However, he emphasized Beijing’s readiness to return to the table under the right conditions.

“China’s attitude is very clear,” Guo said. “We do not want to fight, but nor are we afraid to. If forced to fight, we will do so to the end. When it comes to talks, our door is wide open.”

This tone of cautious openness echoes China’s recent diplomatic efforts to portray itself as the more stable and responsible global actor, especially as the U.S. faces criticism from its allies and economists alike.

A Deal on the Horizon?

While Secretary Bessent cautioned that any agreement “will be a slog,” he stressed that progress in the near term could offer some relief to jittery markets. President Trump, however, appeared more upbeat, expressing hope for a quick resolution.

“They’re going to do very well, and I think they’re going to be happy,” Trump said of the Chinese. “We’re gonna live together very happily and ideally work together.”

Such optimism stands in contrast to recent history. The first Trump administration spent months hammering out a Phase One deal with China that ultimately fizzled, leading to a barrage of tariffs and threats from both sides.

Escalation to the Brink

Since returning to office, President Trump has reignited his tariff campaign with renewed force. Starting in January, the U.S. began applying sweeping tariffs not only on Chinese goods but on imports from dozens of countries—measures Trump dubbed his “Liberation Day” tariffs.

These moves alienated traditional U.S. allies and created ripple effects across the global economy. While Washington framed the tariffs as a way to isolate China, Beijing used the moment to deepen ties with Europe and Southeast Asia, positioning itself as a bulwark against U.S. unpredictability.

When the Trump administration paused some tariffs earlier this month, Beijing remained wary. Chinese officials warned against nations agreeing to anti-China deals in exchange for tariff relief, saying such behavior would cross a red line.

Economic Strain Mounts

The fallout from the trade war has been substantial. U.S. stocks and Treasury yields have steadily declined. Meanwhile, the International Monetary Fund revised global growth projections downward—from 3.3% in 2024 to just 2.8% this year.

Last week, over 1,500 economists signed an open letter slamming the tariffs as “the largest tax increase on trade in almost a century,” adding they had injected chaos into an already fragile global economy.

Chinese media have widely reported on the U.S. backlash, framing the tariffs as a self-inflicted wound. State-run outlets have emphasized the burden on American businesses and consumers, while minimizing domestic economic risks.

Bao Jianyun, a professor at Renmin University in Beijing, told the Global Times that Washington’s mixed messages have eroded Trump’s credibility. “The U.S. goal of containing China remains unchanged,” he said, “but their execution has clearly faltered.”

Diplomatic Tensions Linger

Despite the apparent thaw in rhetoric, tensions still run deep. The Trump administration has struggled to establish meaningful diplomatic channels with Beijing. A recent attempt by Chinese Foreign Minister Wang Yi to open dialogue was reportedly dismissed by Trump aides as inconsequential.

Offensive remarks by U.S. officials have also added fuel to the fire. Vice-President JD Vance recently referred to Chinese workers as “peasants,” drawing sharp criticism in Chinese media and complicating outreach efforts.

China’s Foreign Ministry was clear on what it wants moving forward: negotiations based on “equality, respect, and mutual benefit.”

“Saying that it wants to reach an agreement with China while constantly imposing maximum pressure is not the correct way to deal with China and will not work,” said Guo.

Bottom Line:
A path to renewed U.S.-China trade talks is emerging—but it’s riddled with diplomatic hurdles, mutual distrust, and domestic political pressure. Whether recent optimism translates into real progress remains to be seen, but for now, the world is watching closely—and the markets are breathing a cautious sigh of relief.