President Donald Trump has hinted at a potential reduction in tariffs on Chinese goods, signaling a possible thaw in the tense U.S.-China trade relationship that has rattled global markets.

During a White House press briefing on Tuesday, Trump indicated that the hefty tariffs—some reaching as high as 145%—could soon be eased, though not eliminated entirely.

“145% is very high and it won’t be that high,” the President said during a Q&A with reporters in the Oval Office. “It’ll come down substantially. But it won’t be zero.”

The comments marked a notable shift from the administration’s previously hardline stance and came just hours after Treasury Secretary Scott Bessent reportedly acknowledged the unsustainable nature of the current tariff regime during a closed-door investment event hosted by JP Morgan Chase.

According to a source present at the meeting, Bessent stated that the high tariffs had effectively frozen trade between the U.S. and China, and suggested that a reduction could be imminent. He stressed that the administration’s goal was to establish a more balanced and reciprocal trading relationship, rather than severing economic ties.

The administration’s softened rhetoric buoyed investor confidence, with all three major U.S. stock indices climbing to intraday highs following Bessent’s remarks. The optimism rippled across global markets, as Hong Kong’s Hang Seng Index surged 2.5% on Wednesday, followed by gains of 2% and 1.5% in Japan’s Nikkei 225 and South Korea’s Kospi, respectively.

The long-running trade war between the world’s two largest economies has seen unprecedented tariff levels, supply chain disruptions, and rising fears of a global economic downturn. In retaliation, China imposed tariffs of up to 125% on American goods, restricted key mineral exports, and targeted major U.S. industries—including limiting Hollywood films and returning Boeing aircraft.

Despite the economic strain, Trump emphasized his personal relationship with Chinese President Xi Jinping and expressed hope for renewed dialogue.

“I have a very good relationship with Xi Jinping,” Trump said. “They’re going to be very nice, and we’ll see what happens… Ultimately, they have to make a deal.”

China, for its part, has maintained it is open to negotiations—provided they are based on mutual respect and fairness. A source close to Beijing told CNN that Chinese officials had previously appointed a liaison for talks, but noted concerns over the Trump administration’s unpredictable approach and inflammatory rhetoric from U.S. officials.

Earlier this month, tensions escalated further after Chinese authorities condemned Vice President JD Vance for derogatory comments made during an interview—prompting widespread backlash on Chinese social media.

As both sides weigh their next moves, the prospect of a de-escalation offers a glimmer of hope for global markets—and for businesses caught in the crossfire of a bitter trade dispute.