Trump expects China to strike wider trade pact, says ‘they want it very badly’

President Trump said Monday that he expects China to “follow through” and agree to a full trade deal that opens its markets to U.S. producers during a negotiated pause in sky-high tariffs.

The president said tariffs on Chinese goods would rise again if negotiators cannot reach a favorable agreement during a 90-day pause in a trade war that both sides view as unsustainable.

Still, he said, “I think they’re going to follow through. I think they want it very badly.”

Wall Street breathed a sigh of relief after weekend negotiations between the U.S. and China in Switzerland. The talks resulted in an agreement to slash tariffs and pursue a broader deal that fosters trade between the world’s largest economies.

Stocks rallied on the news, with the Dow Jones Industrial Average surging 1,160 points, or 2.8%, the S&P 500 climbing 3.3% and the Nasdaq shooting up 4.3%.

Under the deal, China agreed to cut its tariff on U.S. goods from 125% to 10%, and the U.S. slashed its levy on China from 145% to 30%.

The U.S.-imposed levy is higher because of a previous 20% tariff that Mr. Trump put on Chinese goods because of the fentanyl crisis.

China also agreed to remove “non-tariff countermeasures” against the U.S. that it has imposed since April 2. That will make it easier for U.S. entities to obtain permits for Chinese rare earth minerals.

The deal scrapped what had effectively been a trade embargo between the countries but left American investors, businesses and consumers in wait-and-see mode as negotiators try to devise a more comprehensive deal without returning to high tariffs.

“There is still the possibility of a snapback, depending on how the talks between the two sides proceed. I do think this episode makes both sides realize how intertwined their economies are,” said Clark Packard, a research fellow on trade at the libertarian Cato Institute.

Mr. Trump said he would raise tariffs again if the two sides cannot reach a deal, but not to 145%.

However, he said, “I think there will be a deal.”

“I think it’s going to be fantastic for China. I think it’s going to be great for us, and I think it’s going to be great for unification and peace,” Mr. Trump said. “We have to get it papered, but they’ve agreed to open up China.”

Washington and Beijing were locked in a bitter trade war after Mr. Trump announced an April 2 “Liberation Day” plan that imposed hefty tariffs on countries selling products to U.S. consumers but not buying nearly as much from American producers.

Chinese retaliation resulted in sky-high tariffs that neither side viewed as sustainable.

The standoff caused factory output in China to slow, and U.S. retailers warned of empty shelves and higher prices as they passed along the added costs from tariffs.

Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer met with Chinese Vice Premier He Lifeng in Geneva over the weekend to de-escalate the fight and commit to further talks over trade.

The countries released a joint statement saying both sides recognize “the importance of a sustainable, long-term and mutually beneficial economic and trade relationship.” They also set up a mechanism for future talks.

Speaking to CNBC, Mr. Bessent suggested that the next step would be a “strategic” decoupling in which the U.S. reduces its overreliance on key products such as steel and pharmaceuticals but does not completely separate itself from Chinese trade.

The decrease in general tariffs does not apply to sector-specific tariffs that Mr. Trump imposed on products such as steel and automobiles or looming tariffs on pharmaceuticals.

Mr. Trump emphasized the likelihood that, through negotiations, American companies might do more business in the Chinese market. He is upset about the U.S. trade deficit with China, which equaled $295.4 billion in 2024, the largest gap with any trading partner.

“The biggest thing to me is the opening up [of China]. I think it would be fantastic for our businesses if we could go in and compete,” Mr. Trump said at the White House.

For years, U.S. leaders have complained that Beijing engages in unfair trade practices that go beyond tariffs. These practices include intellectual property theft and subsidies for industries that export cheap products, undercutting producers in other countries.

“Part of the goal is bringing down these unfair, non-tariff trade barriers, and that’s what we will be focused on,” Mr. Bessent said. “I would imagine that in the next few weeks, we will be meeting again to get rolling on a more fulsome agreement.”

Mr. Trump called the Geneva deal a “total reset” while negotiators deal with larger structural issues, particularly the massive U.S. trade deficit with China.

“The relationship is very good,” the president said. “We’re not looking to hurt China.”

Mr. Trump predicted he would speak with Chinese President Xi Jinping before the end of the week.

Chinese state news agency Xinhua quoted Mr. He as saying the two sides “have taken important steps to resolve differences through equal dialogue and consultation.”

Tariffs are taxes or duties paid by importers on goods from foreign markets.

Foreign countries don’t pay the tariffs directly to the U.S. Treasury. In many cases, U.S. companies pay the levies and might pass on at least some of the costs to consumers through higher prices.

U.S. retailers reacted with relief to progress over the weekend.

“This temporary pause is a critical first step to provide some short-term relief for retailers and other businesses that are in the midst of ordering merchandise for the winter holiday season,” said Matthew Shay, president and CEO of the National Retail Federation. “And over the long term, this lays the foundation for substantial progress in achieving truly fair and balanced trade relationships with both China and our other trade partners around the world.”

Rep. August Pfluger, Texas Republican and chairman of the conservative Republican Study Committee, hailed the Trump administration but urged it to remain vigilant.

“Any trade deal must be enforceable to ensure China doesn’t return to its pattern of broken promises and economic exploitation. American strength, not concession, is the only language China understands,” Mr. Pfluger said.

Democrats argued that Mr. Trump was overstating what had been accomplished in Geneva. They said it amounted to a return of tariffs that Mr. Trump devised.

“There is no deal. There is nothing approximating a deal. They just make things up constantly,” said Sen. Christopher Murphy, Connecticut Democrat.

U.S.-Chinese trade negotiations are the central plank of Mr. Trump’s broader trade agenda, which relies on tariffs to reduce trade deficits, or situations in which a country’s exports to the U.S. far exceed its imports from the U.S.

Mr. Trump says tariffs will force companies to return to America or keep their operations in the U.S., employ American workers and create revenue to fund domestic programs.

Asked whether reducing the tariff on China would undercut these goals, Mr. Bessent said, “This is just a pause.”

Mr. Bessent noted that the 30% tariff is comparable to the 34% “reciprocal” tariff that Mr. Trump outlined in his April 2 plan.

Mr. Trump said the negotiations will have an ancillary benefit: cracking down on fentanyl.

The U.S. pressed China to crack down on the flow of precursor chemicals that flow to places such as Mexico, where cartels use them to make fentanyl. The drugs are trafficked into the U.S.

“When they work on something,” Mr. Trump said of Beijing, “they get it done.”