Trade Tensions Ease: U.S. Signals Open Stance on China Tariffs

U.S. Treasury Secretary Scott Bessent announced that high tariffs between the U.S. and China are unsustainable. The Trump administration is open to tariff negotiations to de-escalate trade tensions. The market has responded positively to potential tariff reductions, but clarity on the issue remains pending.

In a significant announcement, U.S. Treasury Secretary Scott Bessent highlighted that the heavy tariffs between the United States and China, standing at 145% on Chinese products and 125% on American goods, are unsustainable. President Donald Trump's administration has shown readiness to engage in talks aiming to lower these market-straining tariffs, providing hope to economic observers.

Although specific negotiations have yet to commence, the U.S. stock market soared on the mere prospect of reduced trade barriers. This development suggests a potential softening of Trump's hardline trade stance, which has triggered fears of economic turbulence. However, there's no concrete timeline for when these talks might begin, as reported by insiders.

The tariff discussion comes at a time when international trade relationships are strained, with other countries, including EU members and Vietnam, engaging in parallel dialogues to mitigate tariff impacts. Meanwhile, the federal economic surveys and global institutions like the IMF underline the necessity for resolution to avert further economic setbacks.

(With inputs from agencies.)