China as its major trading partner – His U turn on tariffs on that country seems to suggest the same – China tariffs will ‘come down substantially,’ Trump said recently.
US President Donald Trump seems to have virtually acknowledge the might of China as America’s major trading partner as he signalled a potential U-turn on his trade war with China, saying the high tariffs on Chinese goods will “come down substantially. 145% is too high, it will come down, Trump indicated with the rider it won’t be zero either.
But it won’t be zero.” He clarified at a White House event Tuesday. Trump’s flip-flops show on tariffs seems to have made investors highly nervous, stock markets uncertain, and thrown trading partners into a tizzy about what the next moves would be or to put it clearly as one diplomat remarked: What the hell is happening? Another said F….K what’s happening, there seems to be no clarity.
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%. Finally, the China tariffs settled down at a whopping 245% when China hit back with 84% tariffs eventually leading to a 125% with a caveat, we are not going to increase tariffs further. US tariffs are a joke, Xi Jinping had stated.
TARIFFS WILL EVENTUALLY STOP AT THAT.
Trump was hoping against hopes that his unbureaucratic approach far away from the Capitol Hill would win friends overseas and especially China’s supremo Xi Jinping — calling him his friend and claiming he would call and negotiate. He waited endlessly for his phone call on the hotline, but it never happened. China is a proud nation. It’s not a democracy. There is no opposition. What Xi Jinping dictates is what the Chinese people would have to take even if it meant suffering to maintain the nation’s pride.
Xi Jinping knew clearly that he was on the high ground, though nor morally, but trade negotiations wise, he held all the cards and had an ACE up his sleeve. It’s not the US that mattered to him, the world did, China was the powerhouse that supplied all infrastructure materials to the world from cement to steel to aluminium to rare earths and even lithium. to power batteries for EVs being rolled out by 25 leading car manufacturers who have 250 brands on the assembly line.
China’s BYD – Electric Cars sells more cars worldwide than the US made Tesla by Elon Musk.
So not getting the call from Xi must have rattled the highly erratic president Trump who acts on impulse and engages in sabre rattling and is fond of flip-flop shows, one day threatening and another appearing to be making concessions in a generous mood.
The unpredictability of his presidential demeanour and his quixotic decisions has rattled economists worldwide warning that not just USA, but the entire world was being pushed into the precipice of a global recession that could take a heavy toll on all countries.
But what must have given the wake-up call were the numerous Gallup polls or surveys of American people that indicated a negative factor – people were not happy the way he was handling the economy or trade matters, his whimsical approach to sensitive trade matters was hurting them badly – price of eggs shot up from 2$ to 9$ a dozen. Prices of garments were up. Prices of gas were up.
Trump won on his electoral pledge in the 2024 elections that he would bring down prices and make life comfortable to American citizens. But it was not to be for the people who voted for him.
Price of groceries was shooting up. Inflation shot up by 2%. And Chinese goods that were retailing at 2$ to 25$ were now retailing at 25$ to 250$ making them absolutely unaffordable – especially Chinese toys on which American kids feed off most.
Price of groceries was shooting up. Inflation shot up by 2%. And Chinese goods that were retailing at 2$ to 25$ were now retailing at 25$ to 250$ making them absolutely unaffordable – especially Chinese toys on which American kids feed off most.
Trump’s tariff commandments did not work with his trading partners and was boomeranging, economists claim, that he came down from Mount Sinai (White House), though he bemoaned capitol hill politicians and bureaucrats, to ground reality, or ground zero.
That’s why he said: “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 stated at a JP Morgan Chase conference that the trade war with China is unsustainable and expects it to de-escalate soon, a source 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. 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 went public.
“So far, China has struck a defiant tone and refused to back down.” (“China tariffs will ‘come down substantially,’ Trump says, hinting at …”) 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.
Scott Bessent is an experienced man from the world of finance, and he knows its ins and outs, and he is the potential rebalancing factor for Trump, and he listens to him, at least sometimes. That’s why he chose him in the 1st place. He and Marco Rubio are the balancing factors in the Trump administration acceptable to the world.
Asian stocks also rose, with Hong Kong’s Hang Seng Index leading the regional gains. It last traded 2.5% higher, while Japan’s Nikkei 225 was up about 2% and South Korea’s Kospi rose 1.5%.
The world’s two largest economies have slapped record tariffs on each other in a swiftly escalating Trade War that roiled global markets, disrupted supply chains and stoked recession fears.
“So far, China has struck a defiant tone and refused to back down.” (“China tariffs will ‘come down substantially,’ Trump says, hinting at …”) 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 jets intended for use by Chinese airlines to the US.” (“Trump says China tariffs will ‘come down substantially,’ hinting at …”)
It’s not American citizens reeling under soaring prices, so are the Chinese suffering from soaring prices of imported goods that an alternate to offset that is Russia is flooding the Chinese markets with its high-quality goods from Vodka to butter, to honey and chocolates.
Instead of doing what Trump expected from Xi to re-negotiate tariffs, Xi launched an all-out “diplomatic charm offensive” with other trade partners to push back against US efforts to use the tariff war to isolate China economically.
One has to remember that on the geopolitical front — If Europe depends heavily on Russian Gas from the Soviet government owned Gazprom to heat their homes in winters, the band of 27 countries depends on China for all infrastructure materials and cannot afford to have their supply chains of raw materials disrupted.
Trump again expressed his hope for Xi to come to the negotiation table – and promised to “be very nice.” Very Nice probably meant that he and his deputy would not adopt the high school type bullying tactics and berate Xi in the oval office.
No chance. Xi Jinping is made of steel and not icky gooey TV show comedian Volodymyr Zelensky. He declined to attend Trump’s White House inauguration knowing full well, if he said anything on the podium of Capitol Hill, he would not have the right of reply or reject any remarks.
Both Trump and Vance know that Xi is too smart for that and unlike Zelensky, who is desperate to end the war with Russia that has devastated his country and drained him emotionally, Xi is cool as a cucumber and a tough cookie to break. Xi speaks from a position of strength because he runs an autocratic regime back home and he can inflict any would on his nation for the sake of his personal ego masquerading as national pride.
If you didn’t know, Russia makes amongst the best dairy products in the world. Russian goods don’t sell that well as Chinese as they lack a marketing strategy and because of its belligerent approach to other countries that isolates them to the extent of being put under sanctions. All weather friends like China and India risk their fortunes and bail out Russia buying its products mainly crude oil.
Asked if the US was going to play hardball with China or Xi to make a deal, or if officials would mention the Covid-19 pandemic, Trump quickly responded: “No.”
“No, no, we’re going to be very nice. They’re going to be very nice, and we’ll see what happens,” the president added. “But ultimately, they have to make a deal, because otherwise they’re not going to be able to deal in the United States, and we want them involved.”
“I think we’re going to live together very happily and ideally work together, so I think it’s going to work out very well,” he said. For its part, China has left the door open for talks but insisted they must be on equal terms.
A person familiar with the Chinese government’s thinking told CNN last week that China is open to trade negotiations with the US, but any talks should be based on “respect,” as well as greater “consistency and reciprocity” from the Trump administration.
Before Trump unveiled his “Liberation Day” tariffs on April 2, China had designated a point person for talks with the US, the source said, adding that Beijing was unclear about the right contact on the US side. Trump may want to be his own negotiator, but this isn’t compatible with how China works, diplomatic sources familiar with how China operates pointed out.
Referencing hawkish or even hostile views on China expressed by Trump’s Cabinet members, the diplomatic sources said Trump’s failure to reject such views suggested he condoned them despite his public assertions about respecting and liking Xi.
Earlier this month, Beijing slammed US Vice President JD Vance for his comments about “Chinese peasants” in an interview that has drawn widespread ire and ridicule on China’s internet.
Expect US to play softball in the coming days towards achieving a trade deal beneficial to both countries and a period of truce to restore normalcy and push back fears of recession, inflation, stagflation, you name it, whichever way you want in economic terms, a DEAL is in the OFFING to end the TRADE WAR as wiser counsel prevails on both sides heeding the warnings of leading economists, experienced bureaucrats, technocrats and investors of a global recession – and avoid countries pointing accusing fingers at USA saying “you caused it.”
