Without China offering anything, Trump backs down.
Trump Says He Will Be Nice
Yesterday, Trump backed down on trying to get rid of Powell, today, Trump shows who really has the cards regarding China.
Bloomberg reports Trump Floats ‘Substantial’ China Tariff Cuts in Trade Deal
President Donald Trump said he plans to be “very nice” to China in any trade talks and that tariffs will drop if the two countries can reach a deal, a sign he may be backing down from his tough stance on Beijing amid market volatility.
“It will come down substantially but it won’t be zero,” Trump said Tuesday in Washington, following earlier comments from Treasury Secretary Scott Bessent that the standoff was unsustainable. Trump added that “we’re going to be very nice and they’re going to be very nice, and we’ll see what happens.”
Trump also said he didn’t see the need to “play hardball” with Chinese leader Xi Jinping and that during discussions he wouldn’t raise Covid-19 — an issue that is politically sensitive in Beijing. The White House recently launched a website that suggested the virus came from a lab in China, irking the nation’s diplomats.
White House Considers Slashing China Tariffs to De-Escalate Trade War
The Wall Street Journal reports White House Considers Slashing China Tariffs to De-Escalate Trade War
One senior White House official said the China tariffs were likely to come down to between roughly 50% and 65%. The administration is also considering a tiered approach similar to the one proposed by the House committee on China late last year: 35% levies for items the U.S. deems not a threat to national security, and at least 100% for items deemed as strategic to America’s interest, some of the people said. The bill proposed phasing in those levies over five years.
“President Trump has been clear: China needs to make a deal with the United States of America. When decisions on tariffs are made, they will come directly from the President. Anything else is just pure speculation,” White House spokesman Kush Desai said.
Trump Waves White Flag of Surrender
What a hoot.
After the cult applauded the Bessent-sponsored 90-day pause on reciprocal tariffs as 5D chess, Trump is backing down after China smashed Trump in the face with a bigger response than Trump imagined.
So, how should China respond to this overture?
Like this.
China on Wednesday signaled it was open to trade talks with the U.S., though Beijing warned it wouldn’t negotiate under continued threats from the White House. In China’s policymaking circles, Trump’s comments Tuesday were viewed as a sign of him folding, people who consult with Chinese officials said.
Markets Cheer the White Flag
Today, the markets are cheering the white flag and the new Mr. Nice Guy.
They cheered yesterday when Trump backed off the idiotic idea of firing Fed Chair Jerome Powell.
The cult will of course insist this is 8D chess, that tariffs will still be used to balance the budget and eliminate the need for an IRS, that Trump will make shoe and underwear manufacturing great again, and all of the other contradictory and nonsensical economic theories of the president.
Related Posts
April 9, 2025: Trump Capitulates with a 90-Day Pause on Tariffs, DOW Jumps 2,200 Points
Trump has had enough of the stock market decline.
However, Trump did not fully back down on Mexico or Canada, treating our two best trading partners worse than the rest of the world.
April 9, 2025: Administration Lie of the Day: “Trump Goaded China into a Bad Position”
Treasury Secretary Bessent is a bad liar. Clowns portray it as 5D chess.
“Trump goaded China into a bad position.”
What a hoot. The Trump cultists believed that then, and still do. This is what it takes to be a member of the cult.
What we did not know at the time was Bessent’s role in this pause. Now we do.
April 20, 2025: How the Tariff Pause Happened – Navarro Was Purposely Out of the Room
Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick timed a meeting with Trump.
Lutnick Says Tariffs Can Eliminate the IRS and Balance the Budget
On March 12, I commented Lutnick Says Tariffs Can Eliminate the IRS and Balance the Budget
We have an annual trade deficit of $918 billion.
Team Trump proposes $918 billion in “reciprocal tariffs” to make the trade deficit go away.
But to balance the budget and eliminate personal income taxes, Trump would need to collect $7 trillion in tariffs on a net trade deficit of $918 billion.
I would love to hear a detailed explanation of exactly how that works.
Are you ready for that miracle? Me too. But wait, there are still more benefits to this amazing deal.
Trumps Claims
- Tariffs will increase revenue enough to balance the budget
- Tariffs will bring manufacturing back to the US
- Tariffs will reduce inflation
- Tariffs will increase exports
Conflicting Economic Madness
Points 1 and 2 conflict. Tariffs cannot simultaneously bring back manufacturing and raise enough revenue to balance the budget.
Points 2 and 3 conflict. Since the US is one of the world’s highest cost producer of goods thanks to unions, tariffs will not reduce inflation.
Points 2 and 4 conflict. Since the US is one of the world’s highest cost producer of goods, and other countries will retaliate, tariffs will not increase exports.
No one yet can fully explain Trump’s economic plan because it’s all double- or triple- counting of contradictory ideas.
The cult ignores the contradictions. They have to. It’s a requirement of being a true believer.
A Trade War Debate, Who Has the Cards, the US or China?
On April 15, 2025, I asked A Trade War Debate, Who Has the Cards, the US or China?
As a practical matter, for now, and for totally different reasons than Alexander lists, I think Xi is in a position to wait out Trump.
Trump has to worry about midterm elections. Xi does not. Trump also has to worry about agricultural retaliations, rare earth elements, and inflation. Xi does not.
China controls 80% of the supply of rare earth minerals needed for military guidance systems, cell phones, wind turbines, car engines, and computer chips.
Moreover, Trump treated Canada and Mexico worse than China until the recent, and massive escalation.
Instead of seeking cooperation from allies to go after China, Trump went after the whole world! This was a seriously stupid mistake, even if one believes in tariffs.
Longer term, I side with Pettis. But the key questions are still unanswered, when and how? And Trump does not even understand the problem.
Dear cultists, who has the cards?
China should wait for Trump’s call. That offer will only improve.
Fake News
A reader called this fake news.
That’s correct in this respect: No one can possibly believe a proven liar who does not honor his own deals.
So what is Trump really offering? Who knows because it’s likely to change tomorrow.
Nonetheless, it’s white flag by Trump. He is trying to find a way to save face. After bragging he held all the cards, Trump clearly capitulated out of the blue.