Former President Donald Trump is reportedly considering a sweeping rollback of tariffs on Chinese imports—potentially slashing them by as much as 65%. According to sources cited by The Wall Street Journal, internal discussions at the White House are weighing reductions between 50% and 65% of current tariff levels.
Alongside these proposed cuts, the administration is evaluating a tiered tariff strategy. The framework, which echoes a plan previously floated by the House Select Committee on China, would impose moderate 35% duties on non-sensitive imports, while ramping up tariffs to 100% or more for products deemed vital to national security. This system would be phased in over five years.
Trump himself acknowledged the potential shift during a press event Tuesday, confirming that the steep 145% tariffs enacted during his second term are likely to come down. “It won’t be zero,” he said, signaling a softer stance while keeping pressure on Beijing. The hint of flexibility brought a measure of relief to jittery markets.
China, for its part, signaled cautious openness to renewed trade talks—on the condition that the U.S. reduces its combative rhetoric.
Trump Dismisses Powell Firing Rumors Amid Legal Concerns
Meanwhile, speculation that Trump might try to remove Federal Reserve Chair Jerome Powell has been put to rest—for now. Trump addressed the rumors directly, saying, “That’s just media noise,” and claimed he never intended to fire Powell, despite his frequent public critiques of the Fed’s interest rate policy.
Behind the scenes, however, the situation appeared more serious. According to the Journal, White House legal teams had discreetly examined whether Powell could be dismissed “for cause”—a legal term requiring substantial proof of wrongdoing. Federal law shields Fed officials from being removed mid-term without solid legal justification, such as misconduct or ethical violations.
That internal review has since been dropped. Trump reportedly backed off after Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick warned that firing Powell could spark market turmoil—and wouldn’t even guarantee a shift in policy. “Changing one chair doesn’t change the votes,” Lutnick told him, noting the rest of the Fed’s board remains aligned.
On Tuesday, Trump publicly clarified his stance. “I have no plans to remove Powell,” he said from the Oval Office, although he reiterated his belief that rates should be cut. “Now’s the perfect time to lower interest rates,” he added. “If the Fed doesn’t act, it’s not the end of the world.”
But Wall Street isn’t betting on a cut any time soon. Analysts say the Fed’s rate-setting committee remains unconvinced, especially after last year’s 1-point cut intended to prevent a recession. With inflation still a concern, the central bank is treading carefully.
Adding complexity is Michelle Bowman, Trump’s recent appointee to the Fed and now its vice chair for bank supervision. Bowman has been outspoken in her warnings against hasty rate reductions, arguing that premature moves could destabilize the economy further.
The situation places Trump in a bind. The Fed’s independence is a cornerstone of global investor confidence. Any perceived political interference could shake faith in U.S. monetary policy, potentially driving up long-term borrowing costs if international investors retr
eat from Treasury bonds.