Trump Prepares to Axe China Tariffs—Wall Street Braces for Whiplash

Trade wars? So 2018. President Trump signals a reversal of China tariffs—because nothing says ’economic strategy’ like whipsawing markets between protectionism and panic.

Subheader: The Art of the Deal—Or Just the Art of Chaos?

After years of economic brinkmanship, the White House appears ready to fold its tariff cards. Critics yawn; traders scramble to price in the next tweetstorm. Meanwhile, Beijing’s poker face remains unreadable—though their crypto-powered yuan might just bypass the dollar while Washington dithers.

Closer: Another day, another pivot. Maybe tariffs were just a bargaining chip—or maybe someone finally checked the inflation data.

Trump says the China meeting will be ‘friendly’

At the same event where he unveiled the UK trade agreement, TRUMP described the upcoming China talks as peaceful. “I think it’s a very friendly meeting. They look forward to doing it in an elegant way,” he said. On the Chinese side, Vice Foreign Minister Hua Chunying had the same energy.

Hua said Beijing had “full confidence” in its ability to manage the trade tensions with Washington. Both sides have been getting hit by mounting economic pressure, and analysts say they’re starting to act like it.

Dan Wang, a political risk consultant at Eurasia Group, told the BBC that the latest signs suggest both governments are open to deal-making. “The recent signals from both sides suggest a transactional de-escalation is on the table,” she said. 

But that doesn’t mean the Core issues are anywhere close to getting fixed. “The systemic frictions between the US and China will not be resolved any time soon,” Olson warned. Olson also believes any tariff reductions that come from the upcoming meeting will be minimal. “Any cuts to tariffs as a result of this meeting are likely to be minor,” he added.

Eswar Prasad, former head of the IMF’s China division, backed that up, saying even if Trump walks back the latest tariffs, the two countries still have a long road ahead. “A realistic goal is probably at best a pullback from the sky-high bilateral tariffs, but that WOULD still leave in place high tariff barriers and various other restrictions,” Prasad said.

China’s exports drop as pressure grows on both sides

On Friday, China’s Ministry of Commerce published trade data for April showing exports to the US had dropped more than 20% compared to the same time last year. At the same time, its total exports climbed 8.1%, higher than analysts expected.

That shows China is managing to MOVE trade elsewhere while still getting hurt by the loss of US business. For Trump, those numbers could add weight to the need to de-escalate fast, especially ahead of his 2025 reelection campaign.

The Switzerland meeting will happen two days after Trump’s administration struck a new tariffs agreement with the UK, making it the first country to cut a formal deal under the new round of import taxes.

Under the agreement, the US will lower duties on a specific set of British cars and allow a batch of steel and aluminum to enter tariff-free. Some other UK industries will also get temporary relief from Trump’s new tariffs, which have been in place since January.

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