Trump administration considers slashing China tariffs by half ahead of trade talks

The Trump administration is weighing a significant reduction to the steep 145 per cent tariff on Chinese imports, with a potential cut to between 50 and 54 per cent as early as next week, as top US and China officials head to Switzerland for high-level trade negotiations, sources close to the matter told The New York Post. 

The proposed tariff rollback is seen as a strategic gesture to jumpstart talks aimed at resolving the protracted US-China trade war. Officials are also considering reducing trade taxes on other South Asian countries to 25 per cent, according to the same sources, Caliber.Az reports via the Post. 

“They are going to be bringing it down to 50% while the negotiations are ongoing,” said one source familiar with the discussions.

President Donald Trump hinted at the reduction during the announcement of a new trade deal with the United Kingdom on May 8, telling reporters, “It’s at 145 so we know it’s coming down. I think we’re going to have a very good relationship [with China].”

The current tariff, deemed “unsustainable” by Treasury Secretary Scott Bessent earlier this week at the Milken Institute Global Conference in Los Angeles, has caused growing concern among major US retailers. CEOs from Walmart, Target, and Home Depot reportedly discussed the issue with Trump in a White House meeting on April 21. Though details of the meeting were not made public, executives described the talks as “productive” and “constructive.”

Following the meeting, rumours of a pending tariff cut began circulating rapidly in retail circles, with some vendors being asked to quote prices based on a range of possible tariffs between 10 per cent and 54 per cent.

Jay Foreman, CEO of Basic Fun, a toy company that manufactures iconic brands such as Tonka Trucks and Care Bears in China, said that industry signals point to an imminent shift.

“The number that emerged to get the ships flowing out of China was 54%. The signals we are getting is that the dam will break by the end of this week or next, that there will be an adjustment,” Foreman noted. 

Retailers are already adjusting their pricing strategies. A Tonka truck currently priced at $29.99 could increase to $49.99 under a 54 per cent tariff — a significant hike, but far more manageable than the $79.99 price tag under the current 145 per cent  rate, according to Foreman.

Many companies, including Basic Fun, are delaying shipments or storing goods in anticipation of a rate change. 

“There are high hopes that the meeting between the US and China in Switzerland will help to de-escalate growing trade tensions and set a path forward for resolving the trade war. [But] it will take a strong signal coming out of the meeting for shippers to readjust their sourcing and routing,” Chief Operating Officer at the Port of Long Beach Noel Hacegaba said. 

The toy industry is among the hardest hit by the tariffs, as roughly 80 per cent of toys sold in the US are manufactured in China.

Despite the White House’s official silence on tariff changes, retailers remain optimistic. 

“Retailers’ behaviour changed after the White House meeting as if they got some confidence,” said Gerald Storch, former CEO of Toys R Us. 

“They are less panicked about how quickly they need a domestic source and they seemed to relax a little bit. This is what I’ve heard from vendors about the retailers’ tone and sense of urgency,” he added.

White House spokesman Kush Desai cautioned that no decisions have been finalised. 

“When decisions on tariffs are made, they will come directly from the President. Anything else is just pure speculation,” he said.

By Sabina Mammadli