China said on Wednesday that the door was "wide open" for trade talks with Washington, a day after U.S. President Donald Trump signalled that high tariffs on goods from China would "come down substantially," although he said "it won't be zero."
Bringing further relief to global markets spooked by his aggressive trade policies, Trump also said on Tuesday he had "no intention" of firing U.S. Federal Reserve (Fed) Chair Jerome Powell.
Since returning to the White House in January, Trump has imposed additional tariffs of 145% on many products from China.
These include duties initially imposed over China's alleged role in the fentanyl supply chain and later over practices Washington deemed unfair.
Beijing has responded with sweeping counter-tariffs of 125% on U.S. goods but reiterated on Wednesday that it was willing to engage in trade talks.
"China pointed out early on that there are no winners in tariff wars and trade wars," Chinese Foreign Ministry spokesperson Guo Jiakun told a daily news conference in Beijing. "The door for talks is wide open."
Chinese President Xi Jinping also warned on Wednesday that trade wars "undermine the legitimate rights and interests of all countries, harm the multilateral trading system, and impact the global economic order," state media reported.
The reiteration from Beijing comes after Trump acknowledged that 145% was a "very high" level and that it will "come down substantially."
"They will not be anywhere near that number," but "it won't be zero," he said.
"Ultimately, they have to make a deal because otherwise, they're not going to be able to deal in the U.S."
Those comments came after Treasury Secretary Scott Bessent told a closed-door event on Tuesday that the tariffs amounted to a reciprocal trade embargo.
Bessent said he expected a de-escalation in the near future, according to a person who was in the room.
Such a development should bring markets some relief, he added at the JPMorgan Chase-hosted event, which was not open to the press.
Trump's recent tirades against Powell had fanned fears of an ouster, sending jitters through markets already spooked by the aggressive trade policies.
The Republican had criticized Powell for warning that the White House's sweeping tariffs policy would likely reignite inflation.
"I have no intention of firing him," Trump said on Tuesday. "I would like to see him be a little more active in terms of his idea to lower interest rates – it's a perfect time to lower interest rates.
"If he doesn't, is it the end? No."
Wall Street's major indexes jumped after a report on Bessent's trade comments, which came on the sidelines of the International Monetary Fund (IMF) and World Bank's Spring Meetings. Asian markets rallied across the board on Wednesday.
The main indexes in Hong Kong and Tokyo were both up around 2%, while gold fell back a day after hitting a record high as investors sought their traditional safe haven.
Bessent said there was much to be done at the end of the day with Beijing, but he noted the need for fair trade and said China needed to rebalance its economy.
The Treasury chief stressed that the goal is not to decouple from China, noting that container bookings between the two countries have slumped recently as trade tensions have heated up.
White House Press Secretary Karoline Leavitt also told reporters that Washington was "doing very well in respect to a potential trade deal with China."
Global finance ministers and central bankers will converge on Washington this week, with all eyes on the progress of trade talks on the sidelines as countries grapple with Trump's new and wide-ranging tariffs.
China's Foreign Minister Wang Yi also held phone calls with his British and Austrian counterparts on Tuesday, urging the U.K. and the European Union to work with Beijing on safeguarding international trade.
Japan was also reportedly eyeing a second visit to Washington by tariffs envoy Ryosei Akazawa next week, with local media reporting Tokyo was considering concessions to assuage Trump.
