Tariff war: Trump’s new plans and the world’s reaction

The 90-day pause on “reciprocal” tariffs announced by US President Donald Trump on April 9 is currently underway. The move was explained by the need to work out trade agreements with 75 countries that he said had approached the White House, and later by the volatility in the stock and bond markets.

However, analysts doubt the success of such a sprint. In addition, the deadline may limit the potential benefits that the US hopes to gain from these negotiations.

A number of talks have already been announced. U.S. Treasury Secretary Scott Bessent, in particular, said that India could become the first country to enter into a bilateral trade agreement with the United States because it does not have “such high tariffs.” This country also has “fewer non-tariff trade barriers, obviously no currency manipulation, very, very small government subsidies, so it’s much easier to reach an agreement with the Indians,” he said on the sidelines of the annual meetings of the World Bank and IMF.

On April 24, Bessent said that the United States and South Korea could reach a “mutual understanding” on trade as early as next week. This statement followed talks between the two countries. However, he did not specify what would be included in this agreement.

At the same time, China, the US’s biggest adversary in the tariff war, has not shown any public intention to give up, although the US has made statements about a possible reduction in duties for this country (currently 145%).

Thus, Bessent said at a private investor summit organized by JPMorgan Chase & Co. that the tariff confrontation with China cannot be maintained by both sides, and that the world’s two largest economies must find ways to de-escalate. According to him, this will happen in the near future.  Bessent characterized the current situation as a trade embargo.

He expressed optimism that tensions could ease in the coming months, but warned that a larger agreement could take longer. Bessent also warned that negotiations between the United States and China have not yet officially begun.

Later, Donald Trump said that the high tariffs on Chinese goods “will be significantly reduced, but not zero.” According to the WSJ, the White House is considering a proposal to reduce them to 50-65%.  However, Trump later clarified that it would depend on Beijing. According to the US president, he will not reduce tariffs on Chinese goods until a new trade agreement is concluded between the countries.  Trump also said that representatives of his administration are negotiating with China.

However, Beijing gave its own response to this. On April 24, He Yadong, a spokesman for the Chinese Ministry of Commerce, said that the unilateral tariff increase was initiated by the United States. And if the Americans really want to solve the problem, they should listen to the rational voices of the international community and their own domestic stakeholders, and completely cancel all unilateral tariff measures against China. He also emphasized the need for equal dialog. Chinese officials have also denied that the two sides are communicating on this issue.

At the same time, Bloomberg reports, citing sources, that China is still considering suspending the 125% duty on some imported goods from the United States, as economic costs put pressure on certain industries. These include additional fees on medical equipment and some industrial chemicals, such as ethane, and airplane lease tariffs (Chinese carriers do not own their entire fleet).

According to CNN, China seems to have quietly canceled 125% tariffs on some semiconductors produced in the US. This was not officially reported.