The administration of United States President Donald Trump is mulling lowering US tariffs on Chinese goods amid talks with Beijing, the Reuters news agency has reported, citing an unnamed source.

No action would be made unilaterally, Reuters reported on Wednesday.

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The source’s comments followed a report from the Wall Street Journal (WSJ) newspaper that the White House is considering cutting its tariffs on Chinese imports in a bid to de-escalate tensions. China tariffs could come down from their current level of 145 percent to between 50 percent and 65 percent, the paper said, citing a White House official.

“We are going to have a fair deal with China,” Trump told reporters on Wednesday, but did not address the specifics of the WSJ report. His remarks followed optimistic comments he made on Tuesday that a deal to lower tariffs was possible.

US Treasury Secretary Scott Bessent also declined to comment on the WSJ story, but said that he would not be surprised if tariffs went down. Bessent said both countries see the current rates as unsustainable, but said he does not know when any negotiations might start. Bessent added that there needs to be a de-escalation before trade talks can proceed.

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“I think both sides are waiting to speak to the other,” Bessent said.

Separate talks between the two countries over tackling the fentanyl epidemic have not yielded results so far, sources say.

White House spokesperson Kush Desai said any reports on tariffs were “pure speculation” unless they came directly from Trump.

Still high

The tariff levels outlined in the Wall Street Journal report would likely still be high enough to deter a significant chunk of trade between the world’s two largest economies. German shipper Hapag-Lloyd said Wednesday that 30 percent of its US-bound shipments from China have been cancelled.

China has retaliated with 125 percent tariffs on US imports, along with other measures.

US stocks extended their early session gains after the report. The market had opened sharply higher on relief among investors after Trump backed away from threats to fire the head of the US Federal Reserve and said a deal with China was possible. The benchmark S&P 500 index was up roughly 3 percent in mid-morning trading.

The WSJ reported that discussions remain fluid and several options are on the table. One option would be a tiered approach similar to one proposed by the House of Representatives Committee on China late last year: 35 percent levies for items the US deems not a threat to national security, and at least 100 percent for items deemed as strategic to US interests. That bill proposed phasing in those levies over five years.

In addition to the steep tariffs on China, Trump has also imposed a blanket 10 percent tariff on all other US imports and higher duties on steel, aluminium and autos. He has suspended targeted tariffs on dozens of other countries until July 9 and floated additional industry-specific levies on pharmaceuticals and semiconductors. That has roiled financial markets and raised fears of global recession.

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The International Monetary Fund (IMF) said on Wednesday that the tariffs will slow growth and push debt higher across the globe. The IMF – which recently released a Global Financial Stability Report – said that US economic growth would be 1.8 percent for the year, a sharp downturn from the 2.7 percent it previously forecasted.