Trump Eases Tariffs on China, Drops Termination Plan on Powell

• Trump signals a reduction in China’s trade tariffs to a significant level, but not to zero.
• Plans to remove Jerome Powell dropped as Trump urged quicker rate cuts to boost the economy. 
• Analysts predict the crypto market could experience a bullish breakout in 2025. 

With global tensions escalating, President Donald Trump struck an optimistic tone on Tuesday, indicating progress on major economic fronts. Speaking at the Oval Office, Trump hinted at a potential softening of tariff policies for China and a cooperative stance to the Fed Chair, sparking renewed optimism in financial and crypto markets. Addressing China’s tariff condition, Trump said,  

145 percent is very high. It won’t be that high, it won’t be anywhere near that high, it will come down substantially, but it won’t be zero.

Trump’s statement garnered global attention as both nations had hurled reciprocal tariffs, following the first stint in early 2025. After the US imposed tariffs in February, China retaliated with a 10% tariff on U.S. crude oil, farm equipment, and large displacement vehicles. 

Further, the to and from movement extended with China responding with an 84% tariff on American goods, and both nations remained in tight reciprocal trade measures. Amid the situation, US Treasury Secretary Scott Bessent suggested a potential “de-escalation,” hinting that the current levels are not sustainable long-term.

Before the tariff reduction on China, Trump had delayed the imposition of tariffs for 90 days, emphasizing that his team would “seal the deal” if nations did not negotiate. Additionally, Trump said the U.S. had received 18 trade proposals from nations seeking closer ties. 

Despite the change in Trump’s stance on China, risks remain. Notably, China had issued a strong warning to countries considering trade agreements with the US that might undermine Chinese interests. The ministry emphasized that any trade deal reached at China’s expense would prompt countermeasures.

Related: Trump Plans to End Capital Gains Tax by 2025 Nationwide

Meanwhile, on the regulatory side, Trump revoked the notion of terminating Jerome Powell, stating that he had “no intention” of firing him, though he continued to pressure the Fed for immediate rate cuts. Citing the situation as the ‘perfect time’, Trump criticized Powell for being slow in implementing the changes. Considering the latest approach on tariffs and Powell, Trump’s move reveals a balancing act on stabilizing markets, while applying sufficient pressure to achieve favourable deals. 

On the other hand, Geoffrey Kendrick, the Global Head of Digital Assets Research at Standard Chartered, predicted that Bitcoin would reach $200,000 by the end of 2025, citing increased Fed rate cut probabilities. Also, supporting Kendrick’s opinion, the former CEO of BitMEX, Arthur Hayes, suggested that tariffs could weaken the US dollar, making crypto more attractive. While the pathway to a trade resolution remains unclear, Trump’s move to reduce tariffs on China may pave the way for a bullish outlook for the crypto sector.  

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