Donald Trump said on Tuesday he had no intention of firing the chair of the United States Federal Reserve and signalled a “substantial” lowering of tariffs on China — bringing relief to global markets spooked by his aggressive trade policies.
Trump’s recent outbursts against Fed boss Jerome Powell had fanned concern that he would oust him, sending jitters through markets.
The president had criticised Powell for warning that the White House’s sweeping tariffs policy would likely reignite inflation.
“I have no intention of firing him,” Trump said on Tuesday. “I would like to see him be a little more active in terms of his idea to lower interest rates — it’s a perfect time to lower interest rates.
“If he doesn’t, is it the end? No.”
Since Trump’s return to the White House in January, the US has imposed additional tariffs of 145 per cent on many products from China.
These include duties initially imposed over China’s alleged role in the fentanyl supply chain and later over practices Washington deemed unfair.
Beijing has responded with sweeping counter-tariffs of 125pc on US goods.
But Trump acknowledged Tuesday that 145pc was a “very high” level, and that this will “come down substantially.”
“They will not be anywhere near that number,” but “it won’t be zero,” the president said.
“Ultimately, they have to make a deal because otherwise, they’re not going to be able to deal in the United States.”
His comments came after Treasury Secretary Scott Bessent told a closed-door event on Tuesday that the tariffs amounted to a reciprocal trade embargo.
But he said he expected a de-escalation in the near future, according to a person who was in the room.
Such a development should bring markets some relief, he added at the JPMorgan Chase-hosted event, which was not open to media.
Wall Street’s major indexes jumped after a report on Bessent’s comments, which came on the sidelines of the International Monetary Fund and World Bank’s Spring Meetings. Asian markets rallied across the board on Wednesday.
‘Doing very well’
Bessent said there was much to be done at the end of the day with Beijing but he noted the need for fair trade and said China needed to rebalance its economy.
The Treasury chief stressed that the goal is not to decouple with China, noting that container bookings between both countries have slumped recently as trade tensions heated up.
Also on Tuesday, White House Press Secretary Karoline Leavitt told reporters that Washington is “doing very well in respect to a potential trade deal with China.”
“The president and the administration are setting the stage for a deal,” she added, noting that “the ball is moving in the right direction.”
She said the feeling was that parties involved want to see a trade deal happen, though China has as of yet not confirmed that it is negotiating with the United States.
As global finance ministers and central bankers converge in Washington this week, all eyes are on the progress of trade talks on the sidelines of the spring meetings as countries grapple with Trump’s new and wide-ranging tariffs.
China’s foreign minister Wang Yi, meanwhile, urged Tuesday in phone calls with his British and Austrian counterparts for the UK and European Union to work with Beijing on safeguarding international trade.
Japan was reportedly eyeing a second visit to Washington by tariffs envoy Ryosei Akazawa next week, with local media saying Tokyo is mulling concessions to assuage Trump.
Japan’s Sumitomo Rubber, which recently bought the Dunlop brand, said it would from May hike tire prices for cars and small trucks in the United States and Canada by up to 25pc.
