US President Donald Trump appears to be looking for a way out to exit from his aggressive tariff policy, especially toward China, according to a recent report by Jefferies.

The report suggests Trump could adopt a flat 10 per cent tariff across the board on all imports and raise tariffs on Chinese goods slightly higher to 20 per cent. Jefferies said, "Trump is looking for an off-ramp from his tariff agenda and that tariffs are likely to end up at a universal 10 per cent across the board, and 20 per cent for China, including the 10 per cent tariff left over from the first Trump administration."

The report mentioned that Beijing has used clever tactics in response to US restrictions. China linked its control over rare earth metals, a critical input for electronics, to America's move to block Chinese access to advanced semiconductors. If Trump wants to strike a deal with China, he may need to distance himself from the national security lobby that supports tougher trade restrictions.

Jefferies said, "Trump will have to part ways with the national security lobby, most particularly given China's smart decision to link the rare earth issue." Meanwhile, to strengthen its economy, China has gone for a sharp jump in gold imports. In April, gold imports in China rose 73 per cent month-on-month to 127.5 tonnes, the highest in 11 months. The figure represents nearly half of the average global monthly gold output outside China.

According to the World Gold Council, holdings in China's gold ETFs have grown by 82.1 tonnes so far this year, surpassing last year's total of 53.3 tonnes, even though 6.1 tonnes were withdrawn since May. In conclusion, the report by Jefferies signals a possible softening in Trump's trade stance, with a proposed shift toward uniform tariffs suggesting an intent to simplify policy while still maintaining pressure on China.

At the same time, China is using smart countermeasures, linking rare earth exports to US restrictions and boosting gold reserves, to strengthen its economic resilience. The evolving dynamic underscores a potential recalibration in US-China trade relations ahead of upcoming policy decisions.

Published on June 13, 2025