May 9th, 2025
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When President Trump talks more about his trade deals with other countries, the situation with tariffs becomes harder to understand. His team seems okay with this, saying Trump uses "strategic uncertainty" to help him.
Trump said the U.S. doesn't need to sign agreements and could sign many quickly. He said he wants fair deals for everyone and doesn't care about other countries' markets. He also said his team can talk about the details of a deal, or he might just put tariffs in place by himself.
"I'm finding it hard to understand," wrote Chad Bown, an expert at the Peterson Institute for International Economics, in an email.
Even though Trump's team says his book 'The Art of the Deal' proves he has a plan, many people are worried. This has made the stock market unstable, caused companies to stop hiring, and created general uncertainty, even though Trump keeps promising new factories and jobs will appear soon.
As part of any agreement, Trump wants to keep some of his taxes on imports. He thinks these taxes can make a lot of money for the government, even though other countries want to remove the taxes by making a deal.
Trump recently spoke about tariffs, saying, "They are great for us. If we can use them and they work well, we will become very rich. We will also pay off debt and lower your taxes a lot because we will collect so much money. This will allow us to lower your taxes even more than the tax cut you are already getting."
According to the Bipartisan Policy Center, the U.S. government has collected $45.9 billion from tariffs this year. This is about $14.5 billion more than last year. This amount could increase a lot because of the standard 10% tariffs, the 145% rate on Chinese goods, and rates up to 25% on steel, aluminum, cars, and products 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 have to happen without the economy failing and causing less tax money to be collected overall. Based on the numbers, this would be almost impossible.
The Republican government said that 17 of their 18 main trading partners have suggested possible agreements they are willing to make. Agreeing on these suggestions would be just the first step in any trade talks.
But foreign leaders say they are not sure exactly what Trump wants or how agreements could become lasting deals. They also remember that Trump approved a trade deal with Mexico and Canada in 2020, but then added new taxes on goods from those countries this year.
When Canadian Prime Minister Mark Carney met with Trump on Tuesday, he said the next trade agreement should be stronger. This is to stop the tariffs on fentanyl that Trump put in place this year, which Canada felt were unfair.
"We will need to change some aspects of it," Carney stated.
The high taxes on goods from China and the high taxes China put on U.S. goods in return are causing problems for the talks. The Treasury Secretary, Scott Bessent, says these taxes cannot last.
Talks between the U.S. and China will start in Switzerland this weekend, but they will probably focus on reducing tensions so that important negotiations can happen later.
The main problem is that China makes most of the world's products, which means it also sells a lot to other countries. This can sometimes hurt local businesses in those countries. China makes many things but doesn't buy much itself, so other countries buy what it makes because people in China don't buy enough. The U.S. wants trade to be more equal, but it has also put taxes on goods from countries that could help it protect their car and technology companies from China.
"Clearly, in this trade problem, China is the most important part," Bessent said this week. "What will happen with China?"
Lin Jian, a spokesperson for China's Foreign Ministry, said the Trump government could restart talks if they stopped using 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 added that they should talk with China as equals, respecting each other and working for things that help both sides.
When asked on Wednesday if he would lower the taxes on goods from China to start talks, Trump answered, "No."
The president also said the Chinese government was wrong to say his team asked for the talks in Geneva.
Does Congress need to agree to these deals?
That's not necessarily the case.
Trump put his tariffs on goods from all countries without asking Congress, using a law from 1977. This has caused several legal problems. The government also says they don't need Congress to agree if they want to change the tariff rates.
Before, presidents, like Trump in his first term with his "Phase One" China deal, could only make "smaller agreements that focused on specific trade and tax issues between the two countries," according to a report from the Congressional Research Service updated in April. Other examples of these smaller agreements include a deal on important minerals in 2023 and an agreement on digital trade with Japan in 2020.
The problem is that Trump has also included things like safety rules for cars and the taxes paid in Europe in his discussions. He wants other countries to change these policies if the U.S. lowers the new tariffs he created. In return, other countries might disagree with the help the U.S. government gives to its businesses.
According to a report, the House and Senate would both need to approve a trade deal that requires changes to US law before it could be finished.
Is it really an agreement if Trump just forces it?
If other countries don't agree with him, Trump has said he might make deals inside the US and set his own import tax, even though he did this in April. The taxes he announced then caused the stock market to go down, which made him stop some of his new taxes for 90 days and use a lower 10% rate while talks are happening.
It looks like Trump might not use the tariffs he talked about if other countries give enough back. This means the U.S. wouldn't lose anything because the tariffs are new. But Trump might also take away the tariffs even if he doesn't get much back.
William Reinsch, an expert from a group in Washington, said that Trump is known for asking for a lot at the start and then asking for less as talks go on. So, we will see how long he continues with this approach. He also said that it seems clear that countries that want a normal trade talk, where both sides give something, are being refused.
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