May 9th, 2025
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When President Trump talks about making trade deals, it makes the situation with import taxes confusing. His team says this confusion is a useful plan.
Trump stated the US does not need to make deals, and could sign many quickly. He wants fair deals for everyone and isn't worried about other countries' businesses. He mentioned his team can discuss the details of a deal, or he might just add taxes on certain goods himself.
Chad Bown, an expert at a global economics group, wrote in an email that he was finding it hard to understand.
Even though Trump's team says his popular book "The Art of the Deal" proves he has a good plan, many people around the world are worried. This has made the stock market unstable, companies have stopped hiring, and there is general uncertainty, even though Trump keeps promising new jobs and factories will appear soon.
Trump wants to keep some taxes on imported goods as part of any agreement. He thinks these taxes will make a lot of money for the government, even though other countries want to get rid of these taxes in a deal.
Recently, Mr. Trump said about tariffs that he sees them as a positive tool. He believes that if we use them successfully, the country will become much wealthier.
He added that the extra money collected could help reduce the national debt and allow for significant tax cuts for the public.
This year, the US government has collected $45.9 billion from taxes on imported goods. This is about $14.5 billion more than last year, according to the Bipartisan Policy Center. These earnings could increase a lot. This is because of the normal 10% tax on imports, the 145% tax on goods from China, and taxes up to 25% on steel, aluminum, cars, and goods from Mexico and Canada.
For Trump to reach his goals of paying off the $36 trillion debt and lowering income taxes, his tariffs would need to collect at least $2 trillion every year. This would need to happen without harming the economy so much that the government gets less tax money in total. Based on the numbers, this would be very difficult to do.
The Republican government says that 17 out of 18 main countries it trades with have shown them lists of possible agreements they are ready to make. Agreeing on these terms would just be the first step in any trade talks.
But leaders from other countries are not sure exactly what Trump wants or how agreements could last. They also know Trump agreed to the United States-Mexico-Canada Agreement in 2020, but then put new taxes on goods from those two countries this year.
When Canadian Prime Minister Mark Carney met with Trump on Tuesday, he said the next agreement should be stronger. This would stop Trump from placing tariffs on fentanyl, which happened this year and Canada thought was unfair.
"Some parts of it must change," Carney said.
The high taxes (tariffs) that China and the U.S. put on each other's goods are causing problems for the talks, and the U.S. Treasury Secretary agrees they cannot continue.
Talks between the U.S. and China will start this weekend in Switzerland, probably to find ways to reduce tensions so that important negotiations can happen.
The main problem is that China makes and sells most things in the world, which can harm local businesses in other countries. Because China makes more than its own people buy, other countries purchase its products. The U.S. wants to change this trade situation, but it has put taxes on goods from countries that could work with it to protect their businesses from China.
"Clearly, China is the biggest part of this trade situation," Bessent said this week. "What will happen with China in the end?"
Lin Jian, a spokesperson for China's Foreign Ministry, said that for the Trump administration to restart talks, it should stop using strong words and charging high 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. He also said the U.S. should talk with China based on equality, respect, and helping each other.
When asked on Wednesday if he would lower the taxes on goods from China in order to have talks, Trump answered, "No."
The president also said the Chinese government was wrong when they claimed his government wanted the talks in Geneva. "Maybe they should look at their files again," Trump said.
Would Congress need to agree to any deals?
That's not necessarily the case.
Trump started his tariffs without Congress's agreement, using a 1977 law. This has caused many legal problems. The government also says that they don't need Congress's permission to change these rates.
According to a report from April, in the past, presidents could only make small deals with China. For example, Trump's "Phase One" deal only covered specific trade and tax issues between the two countries. Other examples of these small deals are an agreement in 2023 about important minerals and a deal with Japan in 2020 about online trade.
The problem is that Trump has also talked about things other than tariffs, like safety rules for cars and taxes in Europe. He wants other countries to change these rules if the U.S. lowers the new tariffs he started. But other countries might not like the money the U.S. government gives to its companies.
According to a report, both the House and the Senate would need to agree on a deal that would remove trade barriers and require changes to US law.
Is it a real agreement if Trump just makes people accept it?
Trump said that if other countries don't agree with him, he will make his own deals and decide on import taxes. He actually did this in April. The taxes he announced then caused financial markets to fall, so he stopped some of his new taxes for 90 days and charged a lower rate while talks happen.
It looks like Trump might agree not to use the tariffs he threatened before if he thinks other countries are giving enough. This means the U.S. doesn't lose anything because the tariffs were new. But Trump might also take away his tariffs without necessarily getting much back.
William Reinsch, an expert from a Washington group that studies world issues, said that Trump often starts with very strong demands but then changes them during talks. He added that countries hoping for usual trade talks where both sides compromise are being refused.
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