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The U.S. trade war with China is expected to ramp down, following comments made by President Donald Trump at a White House news event on Tuesday.
Trump said in the press conference that the new tariff rate “won’t be anywhere near” the sweeping 145% tariff now imposed on Chinese imports, but Trump added that “it won’t be zero.”
Meanwhile, it’s uncertain how China will respond to a tariff reduction from the U.S. China has imposed a 125% retaliatory tariff on all U.S. imports.
The news of plans to substantially reduce the blanket tariff on Chinese goods sent the S&P 500 up 3% by mid-morning on Wednesday.
The news comes about 24 hours after Trump met with CEOs from the nation’s biggest retailers—Walmart, Target, and Home Depot.
Following that meeting, Walmart and Target said the conversation was productive, and Trump noted that the meeting went “very well.”
Target released a statement following the meeting saying that it entailed discussing “the path forward on trade” and that the retailer remains “committed to delivering value for American consumers.”
The tariff chaos prompted Bentonville, Ark.-based Walmart to hold off on releasing its Q1 operating income outlook. Since the beginning of the trade war, the stock value of Minneapolis-based Target has dropped about 20%, and Walmart’s stock has dropped 8.7%.
Walmart noted in its investor meeting in mid-April that roughly a third of its products are imported from China and Mexico, and Target imports roughly 30%
The tariff U-turn is also good news for Asian specialty grocers such as H Mart and 99 Ranch Market. That segment of grocery sales represents about $49 billion in the U.S., according to global research firm IBISWorld.
China responded to the news that Trump intends to ramp down the tariff war, saying it isn’t looking for a fight with the U.S. on trade, according to a story on CNN Business.
“Claiming it wants to reach an agreement with China while constantly applying maximum pressure is not the right way to engage with China — and it simply won’t work,” said ministry spokesperson Guo Jiakun at a news conference, according to CNN.
“China’s position on the tariff war initiated by the United States is very clear: We do not want to fight, but we are not afraid to fight. If it’s to fight, we’ll fight till the end. If it’s to talk, our door is wide open.”