President Donald Trump stated during a White House news conference on Tuesday that tariffs on Chinese imports “will come down substantially, but it won’t be zero,” signaling a potential shift in trade policy amid ongoing economic and political pressure.

Trump’s comments came hours after U.S. Treasury Secretary Scott Bessent called current tariff levels “unsustainable” and said he expects a “de-escalation” in the trade war between the world’s two largest economies.

Under Trump’s latest trade directive, the U.S. imposed 145% import taxes on Chinese goods, prompting Beijing to retaliate with 125% tariffs on U.S. exports. The aggressive tariff regime has impacted global markets, slowed international trade, and triggered investor concerns over rising inflation and borrowing costs in the United States.

“The tariffs are hurting both sides, and neither side thinks the status quo is sustainable,” Bessent reportedly said during a closed-door policy briefing. His remarks, confirmed by two sources familiar with the meeting, were first reported by Bloomberg News and triggered a 2.5% rally in the S&P 500 index.

Despite the market rebound, uncertainty remains high. Economists warn that continued trade tensions may further strain U.S. consumers and exporters already grappling with higher prices and global supply chain disruptions.

Trump, speaking after the ceremonial swearing-in of Paul Atkins as the new chair of the Securities and Exchange Commission, acknowledged the market gains but remained cautious about future negotiations.

“China is going to be a slog in terms of the negotiations,” Bessent added, according to a transcript obtained by the Associated Press.

The White House has not confirmed any formal plans to alter existing tariffs, but analysts say the latest remarks could open the door to renewed talks aimed at easing tensions and stabilizing markets.