President Trump sparked new speculation Wednesday about the future of his trade war with China, following a report that he may soon slash tariffs on Chinese imports—just weeks after hitting Beijing with some of the harshest trade penalties in U.S. history.

According to a Wall Street Journal exclusive, the Trump administration is considering a “tiered” approach to Chinese tariffs that could reduce duties on certain products by more than half. Some items considered non-essential to national security may see tariffs drop to as low as 50%, while critical goods would remain subject to levies of 100% or higher.

Although Trump refused to directly confirm the report, he echoed familiar themes when pressed by reporters in the Oval Office.

“Tariff negotiations are going very well,” Trump said. “They all want to be involved with America. We have a lot of action going on. Everything’s active. Everybody wants to be a part of what we’re doing. We are going to have a fair deal with China. It’s going to be fair.”

Trump’s comments come as markets remain jittery over the ongoing tariff battles. The administration’s initial move in early April imposed tariffs of up to 145% on a wide swath of Chinese goods. That announcement rattled global markets and sent Wall Street into a temporary slide. Now, the White House appears to be signaling flexibility—though not necessarily weakness.

Under the tiered plan reportedly under review, the administration would impose varying tariffs depending on how strategically important the import is to U.S. national interest. Non-essential consumer goods could face moderate tariffs, while sectors like defense, electronics, and biotech could remain heavily restricted.

The WSJ report cited sources familiar with internal discussions, noting that Trump is weighing how best to maintain economic leverage while also lowering inflationary pressure and avoiding long-term economic harm.

A senior official described the process as “surgical,” not a surrender. “It’s not backing down,” the official said. “It’s repositioning.”

If finalized, the changes could significantly alter the landscape of Trump’s trade doctrine. The U.S. has already imposed a sweeping 10% tariff on virtually all imports from non-Chinese nations, along with targeted duties on autos, steel, and aluminum. Tariffs on dozens of nations were suspended earlier this month—but only temporarily, with a July 9 deadline looming.

The moves are being closely watched by major trading partners and global investors, as fears of a prolonged trade war could trigger recessionary risks.

The International Monetary Fund (IMF) sounded the alarm this week. “If sustained, the increase in trade tensions and uncertainty will slow global growth significantly,” said IMF Chief Economist Pierre-Olivier Gourinchas. “The surge in policy uncertainty is a major driver of the economic outlook.”

At the center of the drama is whether Trump’s “art of the deal” approach will hold—or whether economic pressure will force a course correction.

The stakes are high. With more than $700 billion in bilateral trade on the line and the world’s two largest economies in a high-stakes standoff, any sudden move sends shockwaves through markets.

Still, Trump insisted his administration remains in full control of the situation.

“We know what we’re doing,” he told reporters. “We’ve got the strongest hand in the world. They need us more than we need them.”

In the meantime, investors are bracing for more volatility. The Dow has yo-yoed throughout April amid mixed messages about tariffs and trade talks, and business leaders are eager for clarity.

One thing is certain: if the Trump team cuts tariffs in a calculated way—and if China takes the bait without demanding major concessions—it could go down as one of the boldest economic pivots in U.S. history.

But if it backfires, it could also become one of the most dangerous miscalculations in the global economy. As one administration insider put it, “It’s not just a trade war anymore. It’s a chess game—and every move counts.”