May 9th, 2025
Create an account or log in to unlock unlimited access!
When President Trump talks about his trade deals, the situation with tariffs becomes more confusing. His team says he is using 'strategic uncertainty' to help him.
Trump claims the US doesn't need to sign agreements, and could sign many immediately. He wants fair deals for everyone and isn't concerned about other countries' markets. He states his team can negotiate, but he might simply add tariffs by himself.
Chad Bown, an expert at the Peterson Institute for International Economics, wrote in an email, "It is difficult for me to understand."
Although Trump's team uses his popular book "The Art of the Deal" to show he has a great plan, many people around the world are very worried. This has caused an unpredictable stock market, companies stopping hiring, and general uncertainty, even though Trump keeps saying new factories and jobs are coming soon.
In any agreement, Trump wants to keep some taxes on imported goods. He thinks these taxes can bring in a lot of money for the government, which owes a lot of money. However, other countries want to remove these taxes, as this is the main reason for making a deal.
Recently, Trump said about tariffs, "They are very useful for us. If we can use them successfully, they will make us very rich. We will use the money to pay off debt and lower your taxes a lot, even more than the tax cut you will already get."
The U.S. government has collected $45.9 billion from tariffs this year. This is about $14.5 billion more than last year, according to the Bipartisan Policy Center. This money could increase a lot because of the different tariff rates. For example, there is a 10% tax on many goods, 145% on goods from China, and up to 25% on things like steel, aluminum, cars, and imports from Mexico and Canada.
For Trump to reach 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 need to happen without hurting the economy so much that the government gets less tax money overall. Looking at the numbers, this would be very difficult.
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 the first step in any trade talks.
But leaders from other countries have said they don't fully understand what Trump wants or how agreements could be made strong and lasting. They also remember that 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 new agreement should be made stronger. This would help stop Trump from putting taxes on fentanyl, like he did this year, which Canada thought was not fair.
"Some parts of it will need to be different," Carney stated.
The high taxes on goods from China and the USA are causing problems for the talks.
Talks between the U.S. and China will start this weekend in Switzerland, but they will probably only try to reduce tensions so that important discussions can happen.
The main problem is that China makes most things in the world and sells a lot to other countries. This can hurt businesses in those countries. China doesn't buy much of what it makes, so other countries buy its products because people in China don't buy enough. The U.S. wants to fix this, but it has put taxes on goods from countries that could be its friends in protecting their car and tech businesses from China.
"Clearly, China is the most important part of this trade situation," Bessent said this week. "What will happen with China?"
A spokesperson for China's Foreign Ministry, Lin Jian, said that the Trump government could help start talks again by stopping its strong words and high taxes on imports.
Lin said on Tuesday that if the U.S. truly wants to solve the problem by talking, it should stop threatening and pressuring. He also said the U.S. should talk with China as equals, showing respect and working for what helps both countries.
When asked on Wednesday if he would lower the taxes on goods from China to help start talks, Trump answered, "No."
The president also said he did not agree with the Chinese government's statement that his government wanted the talks in Geneva. He said, "I think they should check their records again."
Does Congress have to agree to any agreements?
That's not necessarily the case.
Trump put taxes on goods from other countries by himself, using a 1977 law and without Congress agreeing. This has caused several legal problems. His government also says that they can change these tax rates without needing Congress's agreement.
Before, presidents like Trump could only make smaller agreements about trade and taxes with countries like China, according to a report. For example, there were deals on important minerals in 2023 and on digital trade with Japan in 2020.
The difficulty is that Trump also wants to discuss issues like safety rules for cars and European taxes in these talks. He hopes other countries will change their rules if the U.S. lowers the new taxes it added. Other countries might then complain about the money the U.S. gives to its companies.
According to a report, for a deal that handles "non-tariff barriers" and requires changes to U.S. law, both the House and the Senate would need to approve it.
Is it really an agreement if Trump just makes it happen?
Trump has suggested that if other countries don't meet his demands, he might make deals only within the US and set import taxes. He has already done this before, for example, with the import taxes he announced in April.
It seems Trump will agree not to use the tariffs he threatened if he believes other countries are giving enough. This means the US doesn't really lose anything because these tariffs are new. However, Trump might also remove the tariffs without getting much back.
Trump often asks for a lot at first and then changes his mind during talks. We'll see how long he continues this way," said William Reinsch, an expert at a research group in Washington. "But for now, it's clear that countries hoping for normal trade talks where both sides give a little are being turned away.
May 9th, 2025
US Consumer Confidence Rises Despite Trade Worries
US-EU Trade Fight: Trump's Goals and Europe's Response
Salesforce to Purchase Informatica for Around $8 Billion
European Firms Reduce Spending and Investment in China Due to Slower Growth
Walmart Raises Prices Amid Tariff Worries
Starbucks Workers Strike Over Dress Code Changes: More Than 2,000 Join
Japan's Economy Weakens Due to Trade Tensions and Export Problems
Mixed Asian Shares as China-US Trade Hope Lessens
Wall Street Rises as Fed Warns of Economic Risks
Create an account or log in to continue reading and join the Lingo Times community!