The White House on Tuesday signaled progress toward a potential trade agreement with China, easing investor concerns amid months of escalating tariffs and mounting global economic uncertainty. "We're doing very well with respect to a potential trade deal with China," White House press secretary Karoline Leavitt told reporters, adding, "The president and the administration are setting the stage for a deal with China."
The remarks, coupled with private comments from Treasury Secretary Scott Bessent predicting an imminent de-escalation of the trade conflict, sent markets higher. The S&P 500 jumped 2% in mid-afternoon trading, while the U.S. Dollar Index rose 0.5%.
Bessent, speaking at a JPMorgan Chase-hosted event in Washington, reportedly told a private group of investors that "no one thinks the current status quo is sustainable," and that the U.S.-China standoff was likely to ease. Leavitt declined to confirm whether President Donald Trump had spoken directly with Chinese President Xi Jinping but reaffirmed that "everyone involved wants to see a trade deal happen."
The United States currently imposes a 125% reciprocal tariff on Chinese imports, in addition to a 20% levy aimed at curbing fentanyl-related products. In response, Beijing has enacted its own retaliatory tariffs and export restrictions on critical minerals.
Trump has recently taken a softer tone toward China, contrasting his combative stance with more optimistic messaging about his relationship with Xi and the prospects of a bilateral deal. Although tariffs on dozens of other nations have been temporarily reduced to 10% for a 90-day negotiation window, levies on China remain in place.
Leavitt noted the administration has received 18 proposals from other countries during ongoing global trade negotiations. Bessent previously said the White House is focused on reaching agreements with 15 major trading partners, including Japan, South Korea, and the European Union.
