Trump softens again and says he will significantly lower tariffs on China.

He did something similar a few weeks ago with Europe, just before the EU announced it would respond with harsh tariffs on the United States.

Donald Trump surprised everyone on Tuesday with a change of tone on two of his most controversial economic fronts: his tariff policy against China and his tense relationship with the Federal Reserve.

The president stated that the 145% tariffs on Chinese goods "are going to come down substantially" and asserted that he has no intention of removing Fed Chairman Jerome Powell, despite his frequent criticism.

The statements temporarily calmed the markets, which had been battered by capital flight after days of uncertainty. Trump clarified that, although he expects Powell to lower interest rates, he will not pressure him with layoffs.

"If he doesn't do it, is it the end? No," he said, toning down the aggressive rhetoric that led him to call him a "big loser" just a few days ago.

From threats to truce: the war with China cools down

Regarding the trade conflict with Beijing, Trump admitted that tariffs "won't stay anywhere near" the current level of 145%, although they will remain in place. He avoided giving specific figures, but the message was clear: a de-escalation is coming.

The taxes were originally justified by China's role in fentanyl trafficking and "unfair" trade practices, according to Washington. Beijing's response was swift: 125% tariffs on US products, sparking a war that continues to impact global trade.

On Wednesday, President Xi Jinping warned that tariffs “undermine the legitimate rights of all countries” and affect the international economic order.

Treasury and Commerce also call for relief

Treasury Secretary Scott Bessent described the current tariff levels as a "reciprocal trade embargo" and expressed optimism about a gradual easing of tensions. Commerce Secretary Howard Lutnick also called for a "tariff truce," distancing himself from the more aggressive stance of Peter Navarro, a hawkish Cabinet adviser.

White House spokeswoman Karoline Leavitt said that "the administration is moving very well toward a trade agreement with China" and that "the ball is moving in the right direction."

The economy feels the blow

The tensions have taken a real toll. The International Monetary Fund lowered its growth projection for the United States to 1,8% this year, almost a percentage point lower than previously estimated. Jerome Powell, whose term ends in 2026, has insisted that the trade war is a drag on the economy and has been cautious about the pressure to cut rates.

For now, global markets are breathing a sigh of relief. But the relief is temporary: Trump's signals are ever-changing, and in an economy that increasingly depends on diplomatic balance, every word can trigger or calm a storm.