Overnight we learned that the U.S. and China agreed to slash tariffs all the way down to 30% for 90 days. I suggest this means the "trade war" is over. Which means it was all for nothing, since this will do nothing to reduce the trade deficit. Just as Trump's first trade war led to a record trade deficit. As far as who "won", it's important to note that on Liberation Day Trump imposed a 54% combined tariff on China when China was at 0% against the U.S. Now they are BOTH at 30%. It's the Art of the Deal. https://cnbc.com/2025/05/12/us-and-china-agree-to-slash-tariffs-for-90-days.html… I give this rally a day?
...so if this trade war is over, then it was all for nothing, with little to show for
> at best, US would come out with a net increase of 10-15% tariffs which could raise some billions of dollars, not large enough to provide tariff revenues that could offset a large tax cut, let alone replace the IRS
> a few strategic new investments which may have eventuate anyway
...it would however by offset by
> US loss of international reputation which is an intangible
> a recession being experienced by US tourism and hospitality industry
> loss of confidence in US assets, which is already having an adverse effect on US Treasuries
> higher interest rate on re-financing of US Treasuries
> a cut in US and global growth which leads US and global economy closer to recession
> higher US domestic inflation ahead
I think Trump 2.0 underestimated the international community backlash and push-back and got spooked by created turbulence in the bond market. Fortunately for them, with China coming to the party to unwind the tariffs, it gave them a reprieve to largely discard their absurd tariff policy with some face saving, without having to admit it being a nothingburger at least relative to the audacity of Liberation Day intentions.
Yet for the insiders, it won't be a loss- there would be gains coming from the Middle East, India, Vietnam plus all the possible gains made in the markets. Sadly, that has to come at the expense of many small traders, farmers and exporters the world over from this immoral and corrupt administration.
People say that by imposing 145% tariffs and then backing down to 30%, Trump can leverage the threat of raising them back up to 145%. The opposite is true. By proving that the U.S. economy can't handle 145% tariffs, Trump lost any leverage he once had by threatening 145% tariffs. https://x.com/PeterSchiff/status/1921883337016156535
Do you not notice that Trump has been quiet about this 'win' because it wasn't his win - it was Bessent who was left to deal with the mess Trump created by pushing it to 145% - Trump can't claim a win with a 115% backdown on his tariff.
This could serve as a lesson to Trump 2.0 for not being too over-confident in 'bullying' other countries to extract economic rent in such a perverse way.
