U.S. Futures And Asian Markets Rise After Trump Suggests China Tariffs Will ‘Come Down Substantially’
Key Facts
Dow Futures were up 656.00 points or 1.6% in the premarket, while S&P 500 Futures rose 113 points or 2.1%.
The tech-heavy Nasdaq futures surged by more 2.5%, rising to 18,852.25 points.
Asian markets also reacted positively to Trump’s suggestion of a climb-down in tariffs, with the Hong Kong-based Hang Seng index rising 2.37%, while Japan’s benchmark Nikkei 225 rose nearly 1.9%.
European markets also opened strongly on Wednesday morning, with the London Stock Exchange’s FTSE 100 index rising 1.5%, while the pan-European STOXX Europe 50 index was up 2.2%.
The price of Bitcoin, which has been trending up in the past week despite market turmoil, also continued its upward trend by rising $94,175—up more than 6.5% in 24 hours.
What Did Trump Say About Lowering China Tariffs?
Speaking to reporters at the Oval Office on Tuesday evening, Trump said he expects Chinese President Xi Jinping to come to the table to negotiate a trade deal and said he plans to be “very nice” to China. “We’re going to be very nice. They’re going to be very nice, and we’ll see what happens…But ultimately, they have to make a deal…and we want them involved.” Addressing his 145% tariffs on all Chinese imports, Trump acknowledged that the number was “very high” and said: “It won’t be anywhere near that high. It’ll come down substantially. But it won’t be zero.”
What Did Scott Bessent Say About The China Tariffs?
Trump’s comments on lowering tariffs against China came hours after Treasury Secretary Scott Bessent expressed concerns that the high tariff rates both countries had imposed on each other was essentially halting trade between the U.S. and China and was unsustainable. According to Bloomberg, Bessent addressed a closed door event hosted by JPMorgan Chase on Tuesday, where he said the current tariff rates amounted to a “trade embargo” and Washington’s goal was not to “decouple from China.” Bessent said he believed the trade tensions would cool in the next few months but noted that a full fledged deal could take two to three years. It is unclear if this means a temporary tariff relief measure will be put in place while trade negotiations happen.
Tangent
Aside from floating the idea of slashing tariffs, Trump also told reporters that he “has no intention of firing” Federal Reserve Chair Jerome Powell, in a possible bid to calm jittery markets. In a u-turn from his earlier comments about Powell’s “termination,” the president told reporters Tuesday that “I have no intention of firing him, I would like to see him be a little more active in terms of his idea to lower interest rates.” He then blamed the press, saying it “runs away with things,” and reiterated that he “never did” intend to fire Powell. The comments were a sharp shift in tone for Trump, who had publicly lashed out at Powell after the central bank head raised concerns about Trump’s tariffs raising inflation last week and signalled that a rate cut was likely not coming soon. Trump, who has been pushing for lower interest rates, assailed Powell in a Truth Social post on Thursday and said his “termination cannot come fast enough!” Later that day, Trump insisted that he had the power to remove Powell from office, telling reporters, “If I ask him to, he’ll be out of there…I’m not happy with him. I let him know it, and if I want him out, he’ll be out of there real fast, believe me.”
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