Trump hints at softening China tariffs and says no plan to sack Fed boss

In a recent turn of events, US President Donald Trump has softened his stance regarding China and Jerome Powell, the head of the US Federal Reserve. After a series of critical remarks aimed at Powell, Trump stated that he has 'no intention of firing' him. However, he expressed a desire for Powell to be 'a little more active' in cutting interest rates. During a press conference in the Oval Office, Trump conveyed optimism about improving trade relations with China. He indicated that the tariffs he imposed on Chinese imports would 'come down substantially,' although he clarified that they would not be eliminated entirely. These tariffs are part of Trump's broader economic strategy, which aims to encourage factories and jobs to return to the United States. Additionally, he believes that reducing interest rates will help lower borrowing costs for American citizens. Currently, Trump has raised tariffs on Chinese goods to an alarming 145%, which has prompted retaliatory measures from China and raised concerns among economists about the potential global repercussions of a trade war. In his remarks to reporters, Trump mentioned that he would approach negotiations with Beijing in a 'very nice' manner, hoping to secure a favorable trade deal. Earlier, US Treasury Secretary Scott Bessent expressed expectations for a de-escalation of the trade war, labeling the current situation as 'not a joke. ' The ongoing trade war has caused significant volatility in financial markets worldwide, and Trump's comments regarding Powell have only added to this uncertainty. The Federal Reserve has refrained from cutting interest rates this year, following a one-percentage-point reduction late last year, a decision that Trump has heavily criticized. Just last week, the president intensified his attacks on Powell, referring to him as 'a major loser. ' These comments led to a selloff in stocks, bonds, and the US dollar, although markets have since begun to recover from those losses. Kevin Hassett, the Director of the National Economic Council, revealed on Friday that Trump was exploring the possibility of dismissing Powell, who was first nominated to lead the central bank in 2017 and was later reappointed by Joe Biden in 2021. It remains unclear whether Trump possesses the authority to fire the Fed chair, as no other US president has attempted such an action. On Wednesday, major Asian stock markets experienced gains, suggesting that investors welcomed Trump's latest remarks. Japan's Nikkei 225 index rose approximately 1. 9%, while Hong Kong's Hang Seng climbed around 2. 2%. In contrast, mainland China's Shanghai Composite saw a slight decline of less than 0. 1%. This positive trend followed gains in US shares on Tuesday, with the S&P 500 ending the session up 2. 5% and the Nasdaq rising by 2. 7%. US futures also traded higher overnight, indicating that investors are optimistic about market performance when trading resumes. However, there are concerns that pressure on Powell to lower interest rates could lead to rising prices, especially as trade tariffs are already contributing to inflation. The ongoing trade tensions between the world's two largest economies, along with US tariffs on other countries, have created uncertainty regarding the global economy. Recently, the International Monetary Fund (IMF) downgraded the US economy, citing uncertainty stemming from tariffs. The IMF predicts that the sharp increase in tariffs and the prevailing uncertainty will result in a 'significant slowdown' in global growth. Trump has imposed tariffs of up to 145% on imports from China, while other countries are facing a blanket US tariff of 10% until July. His administration indicated that when new tariffs are added to existing ones, the levies on certain Chinese goods could reach as high as 245%. In retaliation, China has implemented a 125% tax on US products and has vowed to 'fight to the end. ' Although the Chinese government has not yet officially responded to the latest statements from the Trump administration, an article in the state-controlled Global Times quoted commentators suggesting that the US is beginning to recognize that tariffs may do more harm than good to the American economy.