SOURCE :- THE AGE NEWS
By Michael Koziol
Washington: US President Donald Trump says he will substantially lower his unprecedented 145 per cent tariffs on Chinese goods and “won’t play hardball” in recognition the current trade war between the world’s two largest economies cannot last.
Trump’s comments came after US Treasury Secretary Scott Bessent told a closed-door meeting with investment bankers the negotiations with China would be a “slog” but neither side considered the status quo sustainable.
US President Donald Trump acknowledged the current 145 per cent tariff on imports from China was “very high”.Credit: AP
“I’m not going to say, ‘Oh I’m going to play hardball with China’,” Trump said in the Oval Office on Wednesday AEST. “We’re going to be very nice, they’re going to be very nice.
“But ultimately, they have to make a deal because otherwise they’re not going to be able to deal in the United States. We want them involved. But they have to – and other countries have to – make a deal. And if they don’t make a deal, we’ll set the deal.”
Trump acknowledged the current 145 per cent tariff on imports from China was “very high” and effectively a trade embargo. Whatever number was finally set would be much lower, he said.
“It won’t be anywhere near that high,” he said. “It’ll come down substantially, but it won’t be zero. It used to be zero, we were just destroyed. China was taking us for a ride.
“It’s at 145 per cent. It will not be anywhere near that number … If we don’t make a deal, we’ll just set it. We’ll just set the number.”
Maintaining that he enjoyed a great relationship with Chinese President Xi Jinping, Trump said Beijing would ultimately do well out of any trade deal. “I think they’re going to be happy, and I think we’re going to live together very happily and ideally work together.”
Trump said the deal would be crafted by himself, Bessent and Commerce Secretary Howard Lutnick – who this month counselled the president to wind back his so-called reciprocal tariffs to a baseline of 10 per cent for 90 days – to allow for negotiation.
He said “others” would also be involved but did not mention by name his senior trade and manufacturing aide Peter Navarro, the hard-line tariff enthusiast.
The president gave no indication of a timeline or deadline for those negotiations to take place.
He also backtracked on earlier threats to oust Federal Reserve chairman Jerome Powell, whom he has strongly criticised for being “too slow” to lower US interest rates. Trump said he had given no consideration to sacking Powell and “never did”.
“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. This is a perfect time to lower interest rates. If he doesn’t, is it the end? No, it’s not.”
Last week, Trump said he was not happy with Powell and if he wanted Powell out, he would be out “real fast”.
The comments came after Bessent addressed a private meeting at JPMorgan Chase, the country’s largest investment bank, in Washington on Tuesday and reportedly acknowledged the trade war with China was not sustainable.
“I do say China is going to be a slog in terms of the negotiations,” Bessent said according to a transcript obtained by The Associated Press. “Neither side thinks the status quo is sustainable.”
Meanwhile, world bankers and economists gathered at the International Monetary Fund in Washington heard the IMF was forecasting a significant slowdown in global growth due to Trump’s tariffs, and had slashed its US growth forecast from 2.7 per cent to 1.8 per cent, partly due to the tariff program.
The IMF also cut Australia’s 2025 growth forecast from 2.1 per cent to 1.6 per cent, a cost to the economy of about $13 billion.
IMF chief economist Pierre-Olivier Gourincha said the fund was not forecasting a US recession because the US economy was “coming from a position of strength”.
But the economy was already cooling off, and only 0.4 percentage point of the 0.9 per cent reduction in forecast growth was attributed to the tariffs, he said.
With AP
