Trump changes tack on China tariffs: 'We'll live very happily together'

AUTHOR:M.J. GDNUS

US President Donald Trump signaled a potential turnaround in his trade war with China when he said that high tariffs on Chinese goods would be "substantially reduced, but it won't be zero".

Trump's remarks, made at a White House briefing on Tuesday, appeared to mark a rhetorical downgrade after weeks of tough talk and retaliation that have pushed tariffs on China past a staggering 145 percent.

"It won't be anywhere near that high. It will be reduced. But it won't be zero," he said.

Trump made the comment when asked about remarks by US Treasury Secretary Scott Besant earlier in the day that the high tariffs between the US and China effectively imposed an embargo on trade between the economies.

Besant told a private investment conference that the trade war with China is unsustainable and that he expects a de-escalation of the battle in the near future, as confirmed to CNN.

Rather than a hard break or a complete separation between the U.S. and China, Besant told investors that the goal is a rebalancing of trade.

The world's two largest economies have slapped record tariffs on each other in a rapidly escalating battle that has roiled global markets, disrupted supply chains and fueled fears of a recession.

So far, China has been "defiant" and refused to back down. Instead, it has retaliated by raising tariffs on U.S. goods to 125 percent, adding more U.S. companies to its export control and non-trusted entities lists, and restricting exports of critical minerals used in everything from iPhones to missile systems.

Through it all, Trump has insisted he has a "very good relationship" with Chinese leader Xi Jinping and told his team that America will not make the first move.

The US president said yesterday that he hoped Xi would come to the negotiating table. Asked if the US would play a "tough game" with China to make a deal, Trump quickly replied that he would not.

"No, no, we'll be very nice. They'll be very nice, and we'll see what happens," he said, adding:

"I think we'll live together very happily and ideally work together, so I think it'll go very well."