May 9th, 2025
Create an account or log in to unlock unlimited access!
When President Trump talks about trade deals, it makes the situation with tariffs confusing. His team seems fine with this, saying it's 'strategic uncertainty'.
Trump states that the United States doesn't need to sign agreements, and could sign many right now. He wants fair agreements for everyone and isn't concerned about other countries' markets. He mentions his team can negotiate terms, or he might put tariffs in place himself.
"I find it difficult to understand," Chad Bown, a senior fellow at the Peterson Institute for International Economics, wrote in an email.
Trump's team says his popular book "The Art of the Deal" shows he has a great plan, but many people around the world are waiting nervously. This has caused changes in the stock market, companies stopping hiring new people, and general uncertainty, even though Trump keeps saying new factories and jobs are coming soon.
Trump wants to keep some tariffs in any agreement. He thinks these taxes will make a lot of money for the government, even though other countries want to get rid of tariffs in a deal.
Trump recently said that tariffs are good for the country. He explained that they can make the country rich and help pay off debt. He also said that the money from tariffs could be used to lower taxes a lot, even more than the tax cut that was already planned.
This year, the U.S. government has collected $45.9 billion from tariffs. This is about $14.5 billion more than last year, according to the Bipartisan Policy Center. These earnings could increase a lot because of the 10% basic tariffs, the 145% tariff on Chinese goods, and high tariffs like 25% on steel, aluminum, cars, and goods from Mexico and Canada.
For Trump to reach his goals of paying back the $36 trillion debt and lowering income taxes, his taxes on imported goods would need to collect at least $2 trillion every year. This would need to happen without hurting the economy so much that the government gets less tax money in total. Based on the numbers, this would be very hard to do.
The Republican government says that 17 out of its 18 main trading partners have given them ideas for possible agreements.
Understanding these ideas together would be the first step in any trade talks.
But leaders from other countries have said they don't know exactly what Trump wants or how agreements could become lasting deals. They also remember that Trump approved the United States-Mexico-Canada Agreement in 2020, but then added new taxes on imports from those same two countries this year.
During a meeting with Trump on Tuesday, Canada's Prime Minister, Mark Carney, said the new trade agreement should be stronger. He said this would help avoid taxes on fentanyl like the ones Trump put in place this year, which Canada thought were unfair.
"Some parts of it will need to change," Carney stated.
High taxes on goods from China and high taxes from China on US goods are making the trade talks difficult. The US Treasury Secretary says these taxes cannot continue.
Talks between the U.S. and China will start this weekend in Switzerland. However, they will probably only try to lower tensions so that important negotiations can happen later.
The main problem is that China makes most things in the world and sells a lot to other countries. This can hurt businesses in those countries. China doesn't encourage its people to buy much, so it sells many goods to other countries because there isn't enough demand in China. The U.S. wants to make trade fairer, but it has also put extra taxes on goods from countries that could be its friends in protecting their car and technology companies from China.
"Clearly, China is the most important part of this trade issue," Bessent said this week. "What will happen with China in the end?"
Lin Jian, a spokesperson for China's Foreign Ministry, said the Trump government could start talks again if they used less strong words and lowered taxes on imported goods.
Lin said on Tuesday that if the U.S. truly wants to solve the problem by talking, it should stop threatening and pressuring. He also said the U.S. should talk with China based on being equal, respecting each other, and helping both sides.
When someone asked Trump on Wednesday if he would lower the taxes on goods from China to start talks, he said, "No."
The president also disagreed with China's government, which said his government asked for the talks in Geneva. "I think they should look at their records again," Trump said.
Would Congress have to agree to any agreements?
That's not necessarily the case.
Trump put taxes on goods from other countries by himself, without Congress agreeing, using a law from 1977. This has caused several lawsuits. The government also says that changing these taxes would not need Congress to agree.
Before, presidents, like Trump with his "Phase One" deal with China, could only make smaller agreements about specific trade and tax issues between two countries. For example, there was an agreement in 2023 about important minerals and one in 2020 about digital trade with Japan.
The difficulty is that Trump has also included other trade barriers, like safety rules for cars and the taxes paid in Europe, in his discussions. He wants other countries to change their policies in return for the U.S. lowering the new tariffs he started. Other countries might disagree with U.S. financial support for its businesses.
According to a government report, both the House and Senate would need to agree to finish a deal about rules that are not taxes and would mean changes to US laws.
Is it a real agreement if Trump just makes people accept it?
Trump suggested he would make deals inside the country and put a tax on imports if other countries didn't agree with him. He actually did this with his tariffs in April.
It looks like Trump might not use the new taxes he talked about if other countries give enough. This means the U.S. doesn't lose anything. But Trump could also stop the taxes without getting much back.
William Reinsch, an expert from a research group in Washington, said that Trump often starts with very big demands but then changes them during talks. He also said that countries wanting a normal trade talk where both sides give up something important are being turned away.
May 9th, 2025
US Consumer Confidence Rises After Tariff Concerns Eased
US-EU Trade Fight: Trump's Goals and Europe's Options
Salesforce to Acquire Informatica for Around $8 Billion
European Firms Reduce Spending and Investment in China Due to Slower Growth
Walmart Raises Prices Amid Tariff Worries
Starbucks Staff Strike Over Dress Code Changes: Over 2,000 Workers Protest
Japan's Economy Weakens: Trade Tensions Hurt Sales and Worry Businesses
Asian Shares Mixed After US-China Trade Optimism Ends
Stocks Rise After Fed Warning and Steady Rates
Create an account or log in to continue reading and join the Lingo Times community!