Trump floats cutting China tariffs ‘substantially’ in trade deal

President Donald Trump said he plans to be “very nice” to China in any trade talks and that tariffs will drop if the two countries can reach a deal, a sign he may be backing down from his tough stance on Beijing amid market volatility.

“It will come down substantially but it won’t be zero,” Trump said Tuesday in Washington, following earlier comments from Treasury Secretary Scott Bessent that the tariff standoff is unsustainable. Trump added that “we’re going to be very nice and they’re going to be very nice, and we’ll see what happens.” 

Trump also said he didn’t see the need to say he’d “play hardball” with Chinese leader Xi Jinping and that during discussions he wouldn’t raise COVID-19, an issue that is very politically sensitive in Beijing. The White House recently launched a website that suggested the virus came from a lab in China, irking the nation’s diplomats.

Trump’s comments come as U.S. stocks and Treasuries have been battered since he rolled out sweeping tariffs on April 2, later announcing a 90-day reprieve for most nations. The 145% duties Trump placed on China this year remain in place, though he’s made exceptions for computers and popular consumer electronics.

“Trump is panicking due to the markets plummeting and still very high U.S. Treasury yields,” said Alicia Garcia Herrero, chief Asia Pacific economist at Natixis. “He needs a deal and quick. China does not need to offer anything big in such circumstances.”

China hasn’t officially responded to Trump’s pledge to play “nice” but the media outlet Cailian called it “a sign that Trump is already softening stance on his signature tariff policies.”

Beijing indicated earlier this month that it wants to see a number of steps from the Trump administration before agreeing to any discussions, especially reining in disparaging remarks by members of his cabinet.

Other conditions include a more consistent U.S. position and a willingness to address China’s concerns around American sanctions and Taiwan, according to a person familiar with the Chinese government’s thinking, who asked not to be identified.

Beijing also wants the U.S. to appoint a point person for talks who has the president’s support and can help prepare a deal that Trump Xi can sign when they meet, the person said. 

Beijing had earlier expressed displeasure with comments Vice President JD Vance made about “Chinese peasants,” with one diplomat calling them “ignorant and disrespectful.”

This story was originally featured on Fortune.com