President Donald Trump is flying to Rome where he will attend the funeral of Pope Francis tomorrow. The president is traveling with First Lady Melania Trump, Chief of Staff Susie Wiles, National Security Adviser Mike Waltz, and Chief of Communications Steven Cheung. Along with them are Wiles’ deputies: Beau Harrison, Nick Luna, Stephen Miller and Dan Scavino, the first lady’s Chief of Staff Hayley Harrison, and Trump adviser Natalie Harp.
Former President Joe Biden with his wife Jill will attend the funeral privately.
Before boarding Air Force One, Trump told reporters that he had spoken with Chinese leader Xi. “The details,” the president said, “I will provide at the appropriate time,” but he would not say whether the talks with the Chinese leader took place after the escalation of trade tensions with Beijing, nor did he say when he spoke with the Chinese leader. “I think on tariffs,” he added in response to reporters’ questions, “we are doing very well. We are resetting the table. We are going to make our country very rich, very, very rich. It’s already happening.”
In an interview with Time Magazine at the White House on Tuesday afternoon, Trump said that 200 world leaders have contacted him to engage in negotiations on tariff reductions but at the same time admitting that none have yet been announced. “We will be ready in three to four weeks. Some countries will ask for adjustments, but the picture is done,” he said, adding that the current measures are producing the desired results. “The tariffs are working. When I arrived, China was making $1 trillion a year from our trade. It was theft. Not anymore,” he said. Asked about Treasury Secretary Scott Bessent’s criticism that the current trade situation is not sustainable, Trump replied, “He’s right, but it wasn’t sustainable before either. We are now rebalancing the situation.” The president also repeated that Chinese leader Xi Jinping had phoned him, adding that his administration is negotiating with China to reach an agreement; conversations that Beijing again denied this morning.
Chinese Foreign Ministry spokesman Guo Jiakun said there had been no phone conversation with the White House or the Trump Administration and that the United States should stop creating this “trade confusion.”
Markets continue to question whether or not the president’s statements are factual. According to Bloomberg, Beijing may ease its tariffs on some products, Guo Jiakun said China is nevertheless preparing for an “extreme scenario” in the trade war with the United States.
While Trump may believe in his trade policy, Treasury Secretary Scott Bessent is less sure that it was the right move to implement now. He made this clear during one of his speeches with financial and private equity leaders by saying that the trade war with China is unsustainable and that he expected de-escalation soon. Uncertainties in U.S. financial markets are also being provoked by the president’s repeated threats to the head of the Federal Reserve, Jerome Powell. That clash risks causing lasting damage to the $29 trillion Treasury market, even after Trump backpedaled on his threat to fire the Federal Reserve chairman, whose term expires in May 2026.
“Once certain things are said, there is no turning back,” Andrew Chorlton, chief investment officer for fixed income at M&G Investments, commented in the Wall Street Journal. “The level of confidence in the Fed’s independence has declined and you will have to pay more to get it back,” he added. The yield on 10-year Treasuries fell to 4.3 percent after rising to more than 4.4 percent this week, heading toward levels reached only during the turmoil earlier this month.
Large investors in Treasury bonds and pension funds not only from the U.S., but from most European and East Asian countries, note that a fear persists in the market about the Fed’s independence, including the possibility of Trump firing Jerome Powell and replacing him with one of his followers, thus opening a debate about the Fed’s independence that has added to concerns about the trade war, with investors already questioning the safe haven status of the U.S. bond market.
“The talk about Powell’s dismissal only increases the market’s demand for risk premiums,” said William Campbell, portfolio manager at DoubleLine Capital, recalling what happened a few years ago in Turkey. “Independence provides stability and, in our view, weakening it inevitably creates uncertainty,” commented Tobias Adrian, the IMF’s top official for markets.
