May 9th, 2025
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When President Trump talks about making trade deals, the situation with tariffs becomes confusing. His team seems to like this, calling it 'strategic uncertainty'.
Mr. Trump believes the United States does not need to make agreements, and could make many very quickly. He wants fair deals for everyone and is not concerned about other countries' economies. He says his team can discuss the conditions for a deal, or he might decide to put taxes on goods himself.
Chad Bown, an expert at the Peterson Institute for International Economics, wrote in an email, "I find it difficult to understand."
While Trump's team uses his popular book "The Art of the Deal" to show he has a plan, many people around the world are worried. This has caused the stock market to change a lot, companies to stop hiring new workers, and a lot of uncertainty, even though Trump keeps promising new factories and jobs will come soon.
In any agreement, Trump wants to keep some of his taxes on imported goods. He thinks these taxes could make a lot of money for the government, which owes a lot of money. However, other countries believe the main reason for making a deal is to get rid of these taxes.
Recently, Trump said tariffs were 'beautiful' and could make the country rich if used well. He also said the money from tariffs would help pay back debt and lower taxes a lot, even more than the tax cuts 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. This amount could increase a lot because of the standard 10% tariffs, the 145% on goods from China, and rates up to 25% on imports like steel, aluminum, cars, and products from Mexico and Canada.
For Trump to achieve his goals of paying back the $36 trillion debt and lowering income taxes, his tariffs would need to bring in at least $2 trillion every year. This would have to happen without hurting the economy so much that the government gets less money from taxes overall. This would be very difficult, almost impossible.
The Republican government said that 17 of their 18 main trading partners have given them lists of possible agreements they are ready to make. Agreeing on these terms would be just the start of any trade talks.
But foreign leaders have said they are not sure exactly what Trump wants or how agreements could become lasting deals. They also know Trump approved the United States-Mexico-Canada Agreement in 2020, but later added new taxes on goods from those countries this year.
When Canadian Prime Minister Justin Trudeau met with Trump on Tuesday, he said the next trade deal should be stronger. He thought this would stop Trump from adding tariffs on Canadian goods again, like the fentanyl tariffs this year, which Canada felt were unfair.
"Some parts of it must change," Carney stated.
High taxes on goods from China, and China's taxes on US goods in return, make the talks very difficult. The Treasury Secretary agrees that these taxes cannot continue.
The first talks between the U.S. and China will begin this weekend in Switzerland. However, they will probably only focus on reducing tensions so that important negotiations can happen later.
The main problem is that China makes most of the world's goods. This means it sells a lot to other countries, which can hurt businesses there. China doesn't encourage its own people to buy much, so it makes things mainly for other countries because there isn't enough buying power inside China. The U.S. wants to have fairer trade. However, it has also put taxes on goods from countries that could be its partners in protecting their car and technology companies from China.
"Clearly, in this difficult trade situation, China is the most important part," Bessent said this week. "What will happen with China in the end?"
A spokesperson for China's government, Lin Jian, said the Trump administration could restart talks by speaking less harshly and removing the extra 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 China. He added that the U.S. should talk with China as equals, showing respect and working for both sides to gain something good.
On Wednesday, when someone asked Trump if he would lower the taxes on Chinese goods to have talks, he said, "No."
The president also said he did not agree with the Chinese government's statement that his team asked for the talks in Geneva. He suggested they look at their files again.
Would Congress have to agree to any agreements?
That's not necessarily the case.
Trump put tariffs on many goods by himself, without Congress agreeing, using a law from 1977. Because of this, there have been several lawsuits. The government also says they can change the tariffs without Congress's approval.
Before now, presidents, like Trump with his "Phase One" China deal, could only agree on "smaller deals about specific trade and tax issues between two countries." This information comes from a report updated in April by the Congressional Research Service. Other examples of these smaller deals are a 2023 agreement on important minerals and a 2020 agreement with Japan about digital trade.
The problem is that Trump has also included things that are not tariffs, like safety rules for cars and taxes in Europe, in his talks. He wants other countries to change these rules if the U.S. lowers the new tariffs he put in place. Other countries might then complain about the money the U.S. gives to its companies.
According to a report, both the House and Senate would need to approve a deal that would change US laws and address trade problems that are not about taxes.
Is it truly an agreement if Trump just forces it?
If other countries don't agree with him, Trump has said he will make his own agreements and decide the import tax rate, which he partly did in April. His earlier import taxes caused problems in the financial markets, so he delayed some new taxes for 90 days and charged a lower rate during talks.
It seems Trump will agree not to start the tariffs he threatened before if he believes other countries are giving enough in return. This basically means the U.S. doesn't lose anything because these tariffs are new. However, Trump might also stop the tariffs without getting much back.
William Reinsch, an expert in Washington, said that Trump often starts talks with very big demands and then changes them later. He wasn't sure how long he would keep doing this. Reinsch added that countries expecting a typical trade negotiation, where both sides give a little, have not had success yet.
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