Trump is optimistic regarding reaching a deal with China despite trade tensions

After days of escalating tensions with China, US President Donald Trump appears to have shifted his stance, with the White House expressing optimism about reaching a trade agreement with China, despite the world’s two largest economies imposing tit-for-tat tariffs.

Trump announced on Friday that the US dollar will remain the reference currency, as the greenback continues to decline in markets, impacted by the US president’s tariff policy.

“We’re the benchmark currency… We always will be,” the Republican president said aboard Air Force One, “I think the dollar is great.”

For her part, US presidential spokeswoman Caroline Leavitt said, “The president made clear that he is open to reaching an agreement with China,” adding, “He is optimistic”.

As tensions continue to escalate, China said on Friday it would increase tariffs on US goods to 125%, indicating it would ignore any additional tariffs imposed by the Trump administration.

The uncertain outlook resulting from Trump’s policies continues to impact the dollar’s exchange rate, which reached its lowest level against the Euro in more than three years on Friday.

European stock markets, which were the only ones holding steady on Thursday, retreated after Beijing’s announcement, but without experiencing the collapse seen earlier in the week.

Meanwhile, electronic trading ahead of the official opening of the New York Stock Exchange indicated that Wall Street’s main indices would rise on Friday.

In the face of this uncertainty, the Federal Reserve, announced that “its fully prepared to intervene to stabilize financial markets if necessary, indicating that this depends on the conditions we monitor,” according to what Susan Collins, an official at the Federal Reserve, told the Financial Times.

Consumer confidence continues to decline in the United States, with a study published by the University of Michigan showing a widespread and comprehensive decline, regardless of age, educational level, location, or political affiliation.

US President Donald Trump said on Friday that his tariff policy was working well, despite turmoil in global markets and the dollar’s decline against other currencies.

Trump wrote on his social media platform, Truth Social, “We’re doing very well on our tariff policy… Great news for America and the world!!! Moving fast”.

China announced on Friday that it would raise its additional tariffs on US products to 125%, a new escalation in its trade war with the United States, while the European Union seeks a diplomatic path forward.

The Customs Tariff Commission of the State Council in Beijing affirmed that the United States’ imposition of abnormally high tariffs on China constitutes a serious violation of international trade rules, denouncing the policy of unilateral intimidation and coercion, according to a statement issued by the Chinese Ministry of Finance on Friday.

The statement added, “At this level of tariffs, American products exported to China are no longer acceptable in Chinese markets,” noting that if Washington continues to increase its tariffs, “China will ignore them”.

Trump announced on Wednesday a 90-day freeze on additional tariffs imposed a few days earlier on 60 US trading partners, pending trade negotiations with these parties.

However, the US president exempted China from this measure and increased tariffs on it.

Since early April, the United States has maintained additional tariffs at a lower level of 10%, and additional tariffs of 25% on steel, aluminum, and automobiles, particularly against the European Union.

As for Beijing, Washington imposed huge additional tariffs on it, amounting to 145%.

The US President’s announcement was met with great relief in the financial markets, with Wall Street finally experiencing one of its best trading sessions in history.

On Wednesday morning, Trump wrote on Truth Social platform, “Now is the time to buy,” and hours later announced the suspension of the fees, a message that prompted several Democratic senators to call on the Securities and Exchange Commission on Friday to open an investigation.

“We urge the SEC to investigate whether the tariff announcements have enriched the Administration’s relatives and friends at the expense of the American people,” the senators wrote in their letter to the commission.

In the letter, they asked to verify whether relatives, including the President’s family, had prior knowledge of the suspension of tariffs and had conducted stock market transactions prior to the President’s announcement.

For their part, the Europeans are trying to negotiate with Washington while seeking to continue cooperation with Beijing.

The Spanish Prime Minister said, “Spain and Europe have a large trade deficit with China, and we must correct it”.

However, “we must not allow trade tensions to hinder the potential for growth in relations… between China and the EU”.

The European Union decided to suspend the tariffs it had imposed on a range of American products, a move Trump deemed very smart.

European Commissioner for Trade Maros Sefcovic is heading to Washington on Monday to discuss the issue, a European Commission spokesperson announced Friday.

European Commission President Ursula von der Leyen said that if talks with the United States fail, Brussels may impose taxes on American tech giants.