The more President Donald Trump talks about making deals with other countries, the more confusing the situation with tariffs becomes. His team seems okay with this, saying Trump is using 'strategic uncertainty' to help him.

Trump asserts the United States is not obligated to sign any agreements, suggesting it could sign 25 immediately. He claims to be seeking equitable deals across all parties and professes indifference to other nations' markets. He states his team is available to negotiate the terms of an accord but reserves the right to unilaterally implement tariffs.

"I am finding it difficult to comprehend," Chad Bown, a senior fellow at the Peterson Institute for International Economics, conveyed via email.

Trump's team says his book "The Art of the Deal" shows he has a great plan, but many people around the world are worried. This has caused the stock market to change a lot, companies to stop hiring, and a lot of uncertainty, even though Trump keeps saying new factories and jobs are coming soon.

As part of any agreement, Trump intends to maintain certain tariffs, arguing that these import duties could yield substantial revenue for a heavily indebted federal government, despite other nations viewing the primary purpose of such a deal as the abolition of tariffs.

Trump recently said he likes tariffs, calling them a good thing for the country. He believes that if they are used successfully, they will make the country very wealthy. This wealth would allow the government to pay off debt and significantly lower taxes, even more than the current tax cuts, because of the large amount of money collected.

The U.S. government's tariff collections have reached $45.9 billion this year, exceeding last year's figures by approximately $14.5 billion, according to the Bipartisan Policy Center.

For Trump to achieve his goals of paying back the $36 trillion debt and lowering income taxes, his tariffs would have to bring in at least $2 trillion every year. This would need to happen without causing the economy to fail in a way that reduces the total amount of tax money collected. Mathematically, this would be almost impossible.

The Republican government has said that 17 of its 18 main trading partners have given them documents that list the possible agreements they are willing to make. Agreeing on these terms would just be the first step in any trade talks.

But foreign leaders have said they are not sure exactly what Trump wants or how deals could become a strong agreement. They also know Trump approved the United States-Mexico-Canada Agreement in 2020, but then put new taxes on those same two trading partners this year.

When Canadian Prime Minister Mark Carney met with Trump on Tuesday, he said the next agreement should be made stronger. This is to stop the fentanyl tariffs Trump put in place this year from happening again, which Canada thought were unfair.

Certain aspects of it will require modification," Carney stated.

The substantial tariffs, specifically the 145% levied on China and Beijing's retaliatory 125% on the U.S., cast a significant shadow over the ongoing negotiations. Treasury Secretary Scott Bessent concedes that these tariffs are not viable in the long term.

The inaugural discussions between the United States and China are slated to commence this weekend in Switzerland, though they will probably be confined to identifying means of reducing tensions sufficiently for substantive negotiations to ensue.

The fundamental challenge stems from China's preeminence as a global manufacturer, positioning it as a major exporter in ways that can undermine domestic industries. Due to China's policy of restraining internal consumption in favour of production, the rest of the world purchases its goods as domestic demand is insufficient. The U.S. seeks to rectify this trade imbalance, but has paradoxically imposed tariffs on potential allies who share concerns regarding China's impact on their automotive and technology sectors.

“Clearly, in this complex trade situation, China represents the most significant factor,” Bessent remarked this week. “What will be the eventual outcome of our dealings with China?”

Lin Jian, the spokesperson for China's Foreign Ministry, proposed that a constructive approach for the Trump administration to initiate discussions would involve moderating their language and reducing punitive import tariffs.

On Tuesday, Lin said that if the U.S. really wants to solve the problem by talking and negotiating, it should stop threatening and pressuring. Instead, it should talk with China based on equality, respect, and mutual benefit.

When questioned on Wednesday about whether he would lower the tariffs on China as a prerequisite for negotiations, Trump responded with a definitive "No."

The president further challenged assertions from the Chinese government claiming his administration had requested the Geneva discussions, suggesting they review their documentation.

Would congressional approval be necessary for any agreements?

That is not necessarily the case; it depends on various factors.

Trump put in place tariffs on his own, without Congress, using a law from 1977 called the International Emergency Economic Powers Act. This has caused many lawsuits. The government also says that any changes to the tariff rates would not need Congress to agree.

Prior to this, presidents, such as Trump during his initial term with the “Phase One” China agreement, were restricted to negotiating “more circumscribed agreements that addressed specific bilateral trade and tariff concerns,” as detailed in a Congressional Research Service report updated in April of this year. Additional instances of such constrained deals involve a 2023 accord regarding critical minerals and a 2020 arrangement concerning digital trade with Japan.

The crux of the challenge lies in Trump's inclusion of non-tariff barriers, such as automotive safety regulations and European value-added taxes, within the scope of negotiations. He seeks reciprocal adjustments to these non-tariff policies from other nations in exchange for a reduction in the recently implemented U.S. tariffs. Conversely, other countries may raise objections regarding U.S. corporate subsidies.

According to the Congressional Research Service report, a deal tackling non-tariff barriers and necessitating alterations to U.S. law would theoretically require authorisation from both the House and the Senate.

Does it truly constitute an agreement if Trump unilaterally imposes it?

Trump has said that if other countries don't agree with him, he will make deals within the country and decide on tariff rates himself. He technically started this with his "Liberation Day" tariffs on April 2. These import taxes caused the financial market to drop sharply, which made him stop some new tariffs for 90 days. He also set a lower rate of 10% while talks are happening.

It seems probable that Trump will consent to refrain from imposing the previously threatened tariffs, provided he deems other nations' concessions sufficient. This effectively implies that the U.S. relinquishes nothing, given the tariffs' recent introduction. However, Trump might also withdraw these tariffs without necessarily securing significant reciprocal gains.

According to William Reinsch, a senior adviser at the Center for Strategic and International Studies, a Washington-based think tank, Trump is known for initiating negotiations with extreme demands and subsequently moderating them, leaving the duration of this approach uncertain. However, it appears that nations seeking standard trade negotiations involving significant mutual concessions are currently being met with resistance.