Hong Kong/Washington, April 23 (CNN) — US President Donald Trump has signaled a potential U-turn on his trade war with China amid continued market volatility, saying the high tariffs on Chinese goods will “come down substantially, but it won’t be zero.”

Trump’s remarks, made at a White House news event Tuesday, appear to mark a rhetorical climbdown after weeks of tough posturing and tit-for-tat retaliation that sent tariffs on China beyond a staggering 145%.

“145% is very high and it won’t be that high,” Trump said in a question-and-answer session with reporters in the Oval Office. “It won’t be anywhere near that high. It’ll come down substantially. But it won’t be zero.”

Trump made the comments when asked about Treasury Secretary Scott Bessent’s remarks earlier in the day that the high tariff rates between the United States and China have effectively embargoed trade between the economies.

Bessent said at a private investment conference hosted by JP Morgan Chase that the trade war with China is unsustainable and he expects the battle to de-escalate in the very near future, a person familiar with the matter confirmed to CNN.

Instead of a hard break or complete decoupling between the United States and China, Bessent told investors that the goal is to have a rebalancing of trade, the source told CNN.

That assessment gave a boost to a Wall Street rally that had taken shape earlier on Tuesday, with all three major US stock indexes hitting their highest levels of the day after Bessent’s remarks were made public.

Asian stocks also rose on Wednesday, with Hong Kong’s Hang Seng Index leading the regional gains, ending the trading day more than 2% higher. Japan’s Nikkei 225 finished about 2% higher and South Korea’s Kospi closed up 1.5%.

Asked about Trump and Bessent’s comments on Wednesday, China’s Foreign Ministry said the US should “stop its threats and coercion, and engage with China on the basis of equality, mutual respect and reciprocity” if it wants to make a deal.

“Claiming it wants to reach an agreement with China while constantly applying maximum pressure is not the right way to engage with China — and it simply won’t work,” Guo Jiakun, a spokesperson for the ministry, told reporters at a regular news conference.

“China’s position on the tariff war initiated by the United States is very clear: We do not want to fight, but we are not afraid to fight. If it’s to fight, we’ll fight till the end. If it’s to talk, our door is wide open,” he added.

Trump’s shift in tone also went viral on the Chinese internet. On Wednesday, the hashtag “Trump chickened out” was trending as a top topic on social media platform Weibo, racking up more than 150 million views.

The world’s two largest economies have slapped record tariffs on each other in a swiftly escalating fight that has roiled global markets, disrupted supply chains and stoked recession fears.

So far, China has struck a defiant tone and refused to back down. Instead, it retaliated by raising tariffs on US goods to 125%, adding more American companies on its export control list and unreliable entity list, and restricting the export of critical minerals used in everything from iPhones to missile systems.

Beijing also moved to exert pain on key US industries, restricting the number of Hollywood movies shown in the country and returning at least two Boeing jetsintended for use by Chinese airlines to the US.