The Trump administration is reportedly considering a significant reduction in tariffs on Chinese imports, cutting them from the current 145% to slightly over 50%, potentially starting as early as next week. This development comes as American and Chinese representatives gear up for high-stakes trade negotiations in Switzerland.
According to individuals familiar with the ongoing talks, U.S. officials are evaluating a proposal to bring the tariffs down to somewhere between 50% and 54%. This shift would mark the beginning of extended discussions aimed at achieving a broader trade deal with Beijing.
In addition to the changes targeting Chinese goods, tariffs on other South Asian nations could also be revised downward, possibly to 25%, one insider revealed.
“They are going to be bringing it down to 50% while the negotiations are ongoing,” the source said of the trade tax on China.
This potential move follows remarks made by President Trump on Thursday in which he confirmed that the tariffs on China were bound to decrease. The comments came during the announcement of a new trade pact with the United Kingdom.
“It’s at 145 so we know it’s coming down,” Trump told reporters. “I think we’re going to have a very good relationship.”
The revised rate range, hovering between 50% and 54%, aligns with earlier internal discussions, sources said. Treasury Secretary Scott Bessent recently remarked that the current 145% rate “isn’t sustainable,” echoing sentiments previously expressed in a meeting between President Trump and the heads of the three largest retail chains in America.
Those executives — Doug McMillon from Walmart, Target’s Brian Cornell, and Ted Decker of Home Depot — characterized the April 21 meeting at the White House as “productive” and “constructive,” though they withheld specifics.
Jay Foreman, CEO of Basic Fun — a company that produces toys such as Tonka Trucks, Care Bears, and My Little Pony in China — noted that talk of a 54% figure gained momentum quickly in retail circles. “The number that emerged to get the ships flowing out of China was 54%,” he said.
“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 told The NY Post.
Retailers, anticipating a shift, have already started requesting new pricing from suppliers based on a range of tariff scenarios, from as low as 10% up to 54%, so they can be ready to adjust when shipments arrive, Foreman added.
In a statement to The Post, White House spokesperson Kush Desai said, “When decisions on tariffs are made, they will come directly from the President. Anything else is just pure speculation.”
Even so, one source said confidence in a deal has been bolstered since Bessent’s remarks at the Milken Institute Global Conference in Los Angeles. “CEOs felt very reassured after Bessent’s remarks at Milken,” the source said. “People are realizing that deals are going to be made.”
The Treasury Department has reportedly been inundated with outreach from Southeast Asian countries eager to solidify their own agreements.
Retail insiders say the speculation has spread rapidly and in detail. Many now believe a tariff between 50% and 54% for China, and 25% for other Asian nations, is imminent.
“We are hearing China at 50% to 54% and [other] Asian countries at 25%,” said Lawrence Rosen, chairman of New Jersey-based arts-and-crafts supplier Cra-Z-Art.
Nick Mowbray, CEO of toy company Zuru — known for its Bunch O Balloons product — shared similar sentiments. “The speculation is 54%,” he said, although he emphasized, “That’s definitely not been told explicitly to retail yet.”
While a drop to 50% would still be burdensome, retailers view it as a more manageable alternative compared to the existing rate, especially as they gear up for the holiday shopping period. Retail executives say price hikes will still be significant.
For example, a Tonka Mighty Dump Truck currently retailing at $29.99 would jump to $49.99 under a 54% tariff. Though steep, that price is “workable,” said Foreman. In contrast, the 145% tariff would inflate the price to nearly $80 — a level he says would kill demand entirely.
Noel Hacegaba, COO at the Port of Long Beach, expressed optimism about the upcoming U.S.-China summit. “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,” he said.
Still, he noted that any shift in the trade landscape would require a clear and convincing outcome from the summit. “It will take a strong signal coming out of the meeting for shippers to readjust their sourcing and routing,” he added.
The toy business has been particularly exposed during the trade standoff, given that around 80% of toys sold in America originate from China.
Basic Fun currently has 35 shipping containers en route to the U.S., with seven of them dispatched after the 145% tariff took effect on April 10. Those particular shipments are being held in storage, as the company cannot absorb the high duties.
The remainder of the toy shipments remain either in Chinese factories or local warehouses, waiting for the go-ahead to be exported, Foreman said.
According to retail veteran Gerald Storch, a former CEO of Toys R Us and HBC, there’s been a notable shift in retailer behavior since the White House discussions.
“They are less panicked about how quickly they need a domestic source and they seemed to relax a little bit,” Storch told The Post. “This is what I’ve heard from vendors about the retailers’ tone and sense of urgency.”
{Matzav.com}