May 9th, 2025
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When President Trump talks about trade deals, the rules about import taxes get more confusing. His team says this confusion is a good plan for him.
Trump says the US doesn't need to sign agreements and could sign many now. He wants fair deals for everyone and isn't concerned about other countries' markets. He says his team can negotiate, or he might simply put tariffs on goods himself.
"I'm having trouble understanding this," Chad Bown, a senior researcher at the Peterson Institute for International Economics, wrote in an email.
Even though Trump's team says his book "The Art of the Deal" shows he has a plan, many people around the world are worried. This has led to an unstable stock market, companies not hiring, and a lot of uncertainty, even while Trump keeps saying new factories and jobs will appear soon.
Trump wants to keep some tariffs as part of a deal. He thinks these taxes on imports can make a lot of money for the government, which has a lot of debt. However, other countries making the deal want to remove these tariffs.
"Tariffs are wonderful for us," Trump recently stated. "If we use them correctly, they will make us very wealthy. We will be able to pay off debt and significantly reduce your taxes because we will collect so much money."
This year, the U.S. government has collected $45.9 billion from taxes on imported goods, which is about $14.5 billion more than last year. This information comes from the Bipartisan Policy Center. This amount could increase a lot because of the usual 10% tax, the 145% tax on goods from China, and high taxes of up to 25% on steel, aluminum, cars, and goods from Mexico and Canada.
For Trump to pay back the $36 trillion debt and lower income taxes, his tariffs would need to collect at least $2 trillion each year. This would have to happen without causing major economic problems that reduce the total tax money. Doing this would be almost impossible.
The Republican government said that 17 of their 18 main trading partners have given them ideas for possible agreements. Agreeing on these ideas would be just the start of any trade talks.
But leaders from other countries have said they are not sure exactly what Trump wants or how agreements could become long-lasting deals. They also know that Trump approved a trade agreement with Mexico and Canada in 2020, but then this year added new taxes on goods from these countries.
During his meeting with Trump on Tuesday, Canadian Prime Minister Mark Carney said the next trade agreement needs to be stronger. He said this is to stop the tariffs on fentanyl that Trump put in place this year, which Canada thought were unfair.
"Some aspects of it will need to change," Carney stated.
The very high taxes on goods from China (145%) and the equally high taxes from China on US goods (125%) are causing problems for the talks. The US Treasury Secretary, Scott Bessent, agrees that these taxes cannot continue.
The first talks between the U.S. and China will start this weekend in Switzerland. However, they will probably only try to lower the tension so that important talks can happen.
The main problem is that China makes and sells more goods than any other country, which can hurt industries in other nations. China doesn't buy many goods itself and focuses on making things, so other countries buy what it produces. The U.S. wants to make trade fairer, but it has also put taxes on goods from countries that could work with it to protect their car and technology industries from China.
"Clearly, China is the biggest part of this trade situation," Bessent said this week. "What will happen with China?"
China's Foreign Ministry said that if the Trump government wants to restart talks, it should stop using harsh words and reduce taxes on goods from China.
Lin said on Tuesday that if the U.S. really wants to solve the problem by talking, it should stop threatening and pressuring China. He also said the U.S. should talk with China as equals, respecting each other and working in a way that helps both countries.
On Wednesday, when someone asked Trump if he would lower the taxes on Chinese goods to start talks, he said, "No."
The president also said the Chinese government was wrong when they claimed his team wanted to talk in Geneva. "I think they should look at their files again," Trump said.
Would Congress have to agree to any deals?
That's not necessarily the case.
Trump put his tariffs in place on his own, using a 1977 law. This has caused several lawsuits. His government also says that they won't need Congress's approval to change the rates.
According to a government report, in the past, presidents like Trump could only make small agreements with other countries about specific trade and tax issues. For example, there was an agreement in 2023 about important minerals and an agreement in 2020 with Japan about online business.
The problem is that Trump also includes things like safety rules for cars and taxes in Europe in his discussions. He wants other countries to change their rules in exchange for the U.S. lowering the new tariffs he started. Other countries might then disagree with the U.S. giving money to its companies.
According to a report, both the House and Senate would have to agree to a deal that would solve trade problems and require changes to U.S. law.
Is it really an agreement if Trump just forces it?
Trump has said that if other countries don't agree with him, he might make deals inside his own country and put taxes on imports. He actually did this in April. These import taxes made financial markets go down, so he stopped some new taxes for 90 days and used a lower tax rate while they talk.
It looks like Trump might not put the tariffs he talked about in place if he believes other countries are giving enough. This means the U.S. doesn't really lose anything because the tariffs are new. But Trump might also take away his tariffs even if he doesn't get much back.
Trump often starts with big demands and then becomes less firm as talks go on, so we'll see if he continues this way," said William Reinsch, an expert at a research group in Washington. "But for now, it seems clear that countries expecting regular trade talks where both sides give something up are being turned away.
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