Without China offering anything, Trump backs down.
Trump Says He Will Be Nice
Yesterday, Trump backed down on trying to get rid of Powell, today, Trump shows who really has the cards regarding China.
Bloomberg reports Trump Floats ‘Substantial’ China Tariff Cuts in Trade Deal
President Donald Trump said he plans to be “very nice” to China in any trade talks and that tariffs will drop if the two countries can reach a deal, a sign he may be backing down from his tough stance on Beijing amid market volatility.
“It will come down substantially but it won’t be zero,” Trump said Tuesday in Washington, following earlier comments from Treasury Secretary Scott Bessent that the standoff was unsustainable. Trump added that “we’re going to be very nice and they’re going to be very nice, and we’ll see what happens.”
Trump also said he didn’t see the need to “play hardball” with Chinese leader Xi Jinping and that during discussions he wouldn’t raise Covid-19 — an issue that is politically sensitive in Beijing. The White House recently launched a website that suggested the virus came from a lab in China, irking the nation’s diplomats.
White House Considers Slashing China Tariffs to De-Escalate Trade War
The Wall Street Journal reports White House Considers Slashing China Tariffs to De-Escalate Trade War
One senior White House official said the China tariffs were likely to come down to between roughly 50% and 65%. The administration is also considering a tiered approach similar to the one proposed by the House committee on China late last year: 35% levies for items the U.S. deems not a threat to national security, and at least 100% for items deemed as strategic to America’s interest, some of the people said. The bill proposed phasing in those levies over five years.
“President Trump has been clear: China needs to make a deal with the United States of America. When decisions on tariffs are made, they will come directly from the President. Anything else is just pure speculation,” White House spokesman Kush Desai said.
Trump Waves White Flag of Surrender
What a hoot.
After the cult applauded the Bessent-sponsored 90-day pause on reciprocal tariffs as 5D chess, Trump is backing down after China smashed Trump in the face with a bigger response than Trump imagined.
So, how should China respond to this overture?
Like this.
China on Wednesday signaled it was open to trade talks with the U.S., though Beijing warned it wouldn’t negotiate under continued threats from the White House. In China’s policymaking circles, Trump’s comments Tuesday were viewed as a sign of him folding, people who consult with Chinese officials said.
Markets Cheer the White Flag
Today, the markets are cheering the white flag and the new Mr. Nice Guy.
They cheered yesterday when Trump backed off the idiotic idea of firing Fed Chair Jerome Powell.
The cult will of course insist this is 8D chess, that tariffs will still be used to balance the budget and eliminate the need for an IRS, that Trump will make shoe and underwear manufacturing great again, and all of the other contradictory and nonsensical economic theories of the president.
Related Posts
April 9, 2025: Trump Capitulates with a 90-Day Pause on Tariffs, DOW Jumps 2,200 Points
Trump has had enough of the stock market decline.
However, Trump did not fully back down on Mexico or Canada, treating our two best trading partners worse than the rest of the world.
April 9, 2025: Administration Lie of the Day: “Trump Goaded China into a Bad Position”
Treasury Secretary Bessent is a bad liar. Clowns portray it as 5D chess.
“Trump goaded China into a bad position.”
What a hoot. The Trump cultists believed that then, and still do. This is what it takes to be a member of the cult.
What we did not know at the time was Bessent’s role in this pause. Now we do.
April 20, 2025: How the Tariff Pause Happened – Navarro Was Purposely Out of the Room
Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick timed a meeting with Trump.
Lutnick Says Tariffs Can Eliminate the IRS and Balance the Budget
On March 12, I commented Lutnick Says Tariffs Can Eliminate the IRS and Balance the Budget
We have an annual trade deficit of $918 billion.
Team Trump proposes $918 billion in “reciprocal tariffs” to make the trade deficit go away.
But to balance the budget and eliminate personal income taxes, Trump would need to collect $7 trillion in tariffs on a net trade deficit of $918 billion.
I would love to hear a detailed explanation of exactly how that works.
Are you ready for that miracle? Me too. But wait, there are still more benefits to this amazing deal.
Trumps Claims
- Tariffs will increase revenue enough to balance the budget
- Tariffs will bring manufacturing back to the US
- Tariffs will reduce inflation
- Tariffs will increase exports
Conflicting Economic Madness
Points 1 and 2 conflict. Tariffs cannot simultaneously bring back manufacturing and raise enough revenue to balance the budget.
Points 2 and 3 conflict. Since the US is one of the world’s highest cost producer of goods thanks to unions, tariffs will not reduce inflation.
Points 2 and 4 conflict. Since the US is one of the world’s highest cost producer of goods, and other countries will retaliate, tariffs will not increase exports.
No one yet can fully explain Trump’s economic plan because it’s all double- or triple- counting of contradictory ideas.
The cult ignores the contradictions. They have to. It’s a requirement of being a true believer.
A Trade War Debate, Who Has the Cards, the US or China?
On April 15, 2025, I asked A Trade War Debate, Who Has the Cards, the US or China?
As a practical matter, for now, and for totally different reasons than Alexander lists, I think Xi is in a position to wait out Trump.
Trump has to worry about midterm elections. Xi does not. Trump also has to worry about agricultural retaliations, rare earth elements, and inflation. Xi does not.
China controls 80% of the supply of rare earth minerals needed for military guidance systems, cell phones, wind turbines, car engines, and computer chips.
Moreover, Trump treated Canada and Mexico worse than China until the recent, and massive escalation.
Instead of seeking cooperation from allies to go after China, Trump went after the whole world! This was a seriously stupid mistake, even if one believes in tariffs.
Longer term, I side with Pettis. But the key questions are still unanswered, when and how? And Trump does not even understand the problem.
Dear cultists, who has the cards?
China should wait for Trump’s call. That offer will only improve.
Fake News
A reader called this fake news.
That’s correct in this respect: No one can possibly believe a proven liar who does not honor his own deals.
So what is Trump really offering? Who knows because it’s likely to change tomorrow.
Nonetheless, it’s white flag by Trump. He is trying to find a way to save face. After bragging he held all the cards, Trump clearly capitulated out of the blue.
Let’s look at imports honestly. China is only doing what is best for China as it should. China did not build factories then fill them with workers making widgets to sell in the US. China allowed AMERICAN corporations to have their goods manufactured in a much less costly environment and American corporations moved their production there. No American owns a factory in China they just pay the Chinese to make their products. The Chinese are happy to make American products but are actually starting to design and produce their own products to replace the American corporations. This is an issue wholly created by American corporations and their greed.
Change needs to start at the root of the problem American corporations. Unregulated capitalism does not benefit the average person or worker, capitalism with strong regulations could benefit everyone involved.
Strongly Disagree.
China’s export subsidies are good for the SOEs and politically connected.
Chinese consumers pay the price.
OK but that doesn’t mitigate the US Corporations from their culpability.
Hahahaha! China still won’t call. They see Trump is holding a weak hand. Now he is offering to lower tariffs to induce China to call. And they won’t.
Bessent is saying these high tariffs are unsustainable.
So are the tech, auto and retail execs that went to the WH to beg Trump to lower tariffs.
China will keep waiting till Trump is under so much pressure that he has no choice but to offer them favorable conditions.
What a show!
One thing for sure, his friend are making a Sht load of $$$$
talk, all talk, manipulating the market
if he calls it off tomorrow, will it be on again next week?
He’s very effectively killing all business planning
And really, is a 62.5% tariff better than 125%?
Absurd
He tries the “mutual assured destruction” threat, now he’s moved into “stop me so I don’t shoot my country in the head”
About immigrants. I was born in San Diego 72 years ago. Latinos always worked in our neighborhood. Landscaping, the trades ( painting, drywall etc.). What a dumbass red herring issue. Please don’t scare me with those hard working Latinos. I guess those folks are scaring everyone in Oklahoma, or somewhere.
Florida as well. They did most of the landscaping and worked in the orange groves.
Hard labor that no one else would touch.
Be careful what you wish for!
Anybody sees a pattern here:
Trump 2016 – We will build a beautiful wall and Mexico will pay for it and we will be safe from immigrants
Trump 2024 – we will put tariffs on China which they will pay for and we will recreate manufacturing in USA
If you have any doubts, please repeat until it sinks.
Trump is not some sort of Messiah who has all answers, will fix everything with a touch of his hand and will create golden age in USA.
He is con men telling his supporters what they want to hear. There is no grand plan or any genius behind. You selected wrong man for that job.
Well, they say that border crossings are down by 95%, so at least this thing worked. And it used to work in the past too, before the open borders mania started. A lot of people were saying it was impossible to fix the border to its previous state.
Border crossings were up under Biden due to Covid 19, a depressed world economy due to Covid, a Eurodollar shortage, Ukraine – Russian War, terrible Latin American policy that supported autocracy, drug running, money laundering, and the native elites at the expense of democracy. Some of this was Trump’s making. Some of it was Biden’s making. Some of it was prior president’s making. And some of it was an unregulated Eurodollar market.
I do not remember such enormous border crossings every time other regions had recessions or depressions (which for much of South America has been the “norm” for decades). As far as South America in general, Trump’s involvement is minimal compared to decades of bad policies. Trump never even had the CIA on his side to get involved south of Mexico.
The border was wide open for anyone to cross. Vast majority of young men, over 90% (which throws away the argument of “bad economy elsewhere”). In Europe it started almost 15 years before Covid.
Well Mish, here is a good of an explanation for the craziness as I can think of (from another site) – Maybe Trump should get his own honorary EW pattern – Trump Zig Zag.
Big announcement -Zig; Followed by “no not really” -Zag
Followed by a half zig, double zag, quadruple zig, quarter zag until everyone just walks away in disgust.
I just call him Captain CaaaaavvveeeMaaan! Whose caricature happens to have and orange cape humorously.
So they say now maybe “just” 50-60% and that a “deal” will take 2-3yrs to negotiate. Meanwhile all tariffs go one and the shipping surcharge is in place.
And Trump never said anything about other more expedient methods of getting rid of Powell, he just does not want to “terminate” him by the usual route of “firing”.
Risk off. Everyone back in the pool. FOMO lives again.
Red light! Green Light!
Exactly! Does remind me of that game.
The only surprise is why it took trump to capitulate once again. Xi has trump where he wants him and is now his lap dog. No backbone whatsoever and his word is totally worthless except when he is providing inside trading information to his “buddies.”
I will wager that Bessent has or will threaten to resign if Trump does not un-fcK this situation in short order. He didn’t take the job to see his reputation implode.
Yeah, Bessent is one of those rich guys who thinks Trump just needs someone smart enough to guide him through the process. Not realizing that Trump thinks he’s the smartest guy in the room and is in actuality to dumb to even know he’s too dumb. If Bessent wants to save his reputation, he better move quickly. No one in the first administration walked away in tact.
Scaramouchi got out ok… he caught on quick and bailed. Grift knows grift.
Quite silly then. Anyone that studies Trump’s past and especially his first term should have seen that those that work with him end up getting hurt and / or discredited. He himself always manages to Dodge the fallout
meanwhile this is happening: DOGE Just Took Over National Parkshttps://wessiler.substack.com/p/doge-just-took-over-national-parks
Of course the bully trump backed down when China kicked him in the nuts by ignoring him. China has had its trading world opened and credibility as a consistent supplier renewed. Now trump is crawling back and lying to the world that 100 countries are negotiating tariffs with his fantasy world.
Trump remains the buffoon of the century!
CAVE IN YEA, but Trump will spin WE WON BIGGLY.
Jumped the gun on this one…..
You’re absolutely correct Mish. Trump folded like a cheap suit. His on/off declarations drive me nuts. How come he couldn’t have done these tariffs differently? Nobody wants to tackle the structural and societal changes needed in America to be more competitive. It will be forced on us as it has been throughout history and with a lot more pain.
IT IS OVER. nothing will be done. or can be done!
just save yourself.!
debt 37 tlrn$. by end of trump 4 years, it will be 45 trln.
assuming 4*5 % rate, it will be about $ 2 tlrn servicing per year
USA gov collects 4*4.5 tln per year
it is BANANA REPUBLIC ON STEROIDS.
There an old saying – “what cannot happen, won’t”. I doubt we can get to 45. But then 10 years ago, I would have said that about 37, so who knows how long this can go on. But gold and the current volatile treasury market says things are not good. And Trump definitely is not helping.
There are theoretically infinite generations to borrow from, so long as we can keep lowering their expectations when they arrive, we should be able to hold it together.
At some point that will fail, but that’s future people problems.
Yes, but we have the reserve currency. So we’re good for now. The one puzzle in my mind is how countries like Japan have even more debt and a trade surplus and still do well. The only consequence I see for Japan is a weaker yen. People have been predicting a crisis that never happens there. They even had a currency trade bet against Japan called the widowmaker because it never paid off.
“Debt” in a currency you produce isn’t debt. Hard to grasp, but when you do, it all becomes crystal clear.
Good point. Japan is at 263% of GDP and the average interest rate on that debt climbed to 3.3% from 2.2% five years earlier.
great, so if you’re so sure of this short the market and be a billionaire.
One hour before the “event”, every expert in the world (even their enemies), were saying that such an event is impossible in the foreseeable future. The “event” was the collapse of the USSR, due to conflicts of interest (Lithuanian’s desire to be more economically independent).
Conflicts of interest could split the USA. But I think the lose confederation of the EU (which doesn’t even have a Treasury Department yet) gives the Europeans a temporal priority in splitting. They’ve already cancelled 3 election results in the last year.
Jerome Powell’s Fed won’t rescue Trump from his tariff mess https://thehill.com/opinion/5259311-trump-federal-reserve-powell/
What a raving embarrassment!
If Trump hangs on for his full term, American greatness will be spoken of in the past tense only.
I have quite a few friends overseas. American greatness was lost in Trump’s first term. Now they just feel embarrassed for us. And it isn’t Trump himself. It’s the people who voted for him.
The people that voted for him and the people in congress and business owners and ceo’s that bend the knee are all a problem. Trump will eventually go away natural or not but the crazy voters are a serious issue.
it’s already lost. fact is no one country can expect to stay n top forever. it’s just not possible and it’s childish and ignorant to think otherwise.
and it doesnt’ translate to a lower standard of living. the average brit isn’t worse off now than the average Brit was at the height of Britain’s colonial might.
But yes, he’s certainly speeding the fall-off a lot. instead of taking the gently slopnig ramp down he’s shoved us off a cliff.
I SEE HOW THIS ORANGE MO11RON AND HIS PALS WILL TACKLE TWIN DEFICITS, 37$ TLRN DEBT , ETC
it is just all hat and no cattle!! as our friends in Texas say
New boss same as old boss. There is no hope with the Uniparty.
Bessent said “Full China deal may take 2-3 years.” Some white flag.
I will be polite: What the flying F do you fail to understand about bragging of holding all the cards, backing off reciprocal tariffs, then backing down when China repeatedly accelerates tariffs on the US.
I have nearly had it with your idiocy.
Nothing has happened with China. Bloomberg will retract. This is a nothing burger. Show me the signed order lowering any tariffs currently on China. Doesn’t exist.
@Mish There is no point in interacting here.
Mr. Heelspurs was and is and always has been a coward.
Fair enough, this sounds like a legitimate timeframe.
But then why doesn’t Trump say that? Why does he go to 100+% tariffs overnight when he’s challenged? Why not explain to the American people that real manufacturing changes will not return to the US in less than 2-3 years?
And then go legit and ask (his Republican) Congress to craft new tax and tariff policies that will achieve these goals w/o turning people’s lives upside down overnight?
B/c he’s an idiot obviously. He talks too much and it isn’t helpful.
If you know he’s an idiot and not helpful when he talks, why are you always defending his erratic policies here then and arguing with those that call out his idiocy?
Why not grab a beer and enjoy the sunshine today? Odds are he’ll say something idiotic tomorrow you can pontificate on
“Why not explain to the American people that real manufacturing changes will not return to the US in less than 2-3 years?”
Because it won’t. It takes 6 – 10 years to design, pull permits, build, buy machinery and implement, hire staff and develop all the contracts necessary for a working supply chain. Not to mention billions of dollars.
But Trump isn’t getting his tariffs put into law through Congress is he? Nope, he is doing it all by personal fiat. Which means when the Democrats take over in 4 years, the then President will simply reverse them. Corporations know that, and they’re not going to make the investment.
did i miss something or it is in 2d edition OF ART OF DEAL chapter 1 –
how to lose trade war to china in 2 weeks?
Today the dollar got weaker. People payed more weaker dollars to buy stocks that are worth less in real terms than they were the day before. Not to mention the basket of goods that continues to rise in price.
DXY is up more than half a percent today.
Most people do not trade currencies, and imports and exports are now toast.
Day late dollar short genie is out of the bottle. Train Wreck coming 💥
jesus!! maga my as1s !!!!!!!
dont have words.. it is just a bad comedy!!
I SEE HOW THIS ORANGE MO11RON AND HIS PALS WILL TACKLE TWIN DEFICITS, 37$ TLRN DEBT , ETC
it is just all hat and no cattle!! as our friends in Texas say
We’re gonna see the bigliest deficit EVER! Everyone is saying so!
not really it is same $ 2 trln +- 200 bln
depends on %rates, how much goes to service debt!
either way, USA is fu11cked!!
The end of the U.S. Golden Era in Capitalism c. 1965. This coincided with an influx of Keynesian economists at the FED. Mainstream pundits think banks lend deposits. Not so.
Powell has now unleased the money stock for the 2nd time thereby validating tariff price increases.
Mish, sometimes a bluff works and sometimes it doesn’t. Most folks trying to sell something shoot for the moon, but that doesn’t mean they’re liars or idiots if they decide to back down and meet somewhere in the middle.
it is one thing when you got home drunk and try to say tot your wife car was broken, and you were trying to get help..
and other thing when you PUT UP 100% TARIFFS on your biggest trade partner w.out any discussions first.
only mo1rons do like this
Agree 100%. This applies to all countries. Trump’s big, bold tariffs were for marketing purposes only. It was foolish and showed immaturity.
The man bankrupted multiple casinos. His incompetence has been proven for decades.
This wasn’t a bluff. This was a moronic outburst. More to come.
Trump doesn’t even own Trump tower in NYC. He just licenses his name.
I don’t think Trump even knows how to play checkers much less poker or chess.
If anyone is actually interested in what Trump administration is engaged in doing read over what Bessent, Sec. of Treasury is opining in his prepared statements.
It is to address Trade imbalances which are overly reliant upon US for Global Demand to lift what is still phrased as a developing Nation economy such as China for instance.
Reforming international Trade relations and institutions which are used to implement current state of affairs is top priority when it comes to economics
If a person should also decide to take a peek at what is really going on watch Rubio as he realigns Dept. of State. This is forging new economic alliances with places such as Latin America and India who will provide more then enough people to replace whatever China may have to offer.
Putin may well get his Bipolar World after all, he will not be a happy man with the results of said Bipolar World.
Oh and for the simple minded, Bessent and Rubio both work for that guy named Trump and are aligned with what his proposed future administration was promised to do on the Campaign trail.
=Trade imbalances which are overly reliant upon US for Global Demand
junkie says IT IS YOUR FAULT TO DEALER.!! it is funny
You and others can continue to spin things anyway you want. It will not change policy direction getting implemented.
The economic world of Globalization is being split apart.
Me, I choose to follow what is real. This is a major geopolitical realignment not seen since end of WW2.
Many will continue to Live in the past fighting a rear guard action.
Analysts are doing this all the time.
No need to say directly you are in the Trump Cult to the end, we get it.
Maybe you should unstick your head shoved so far up your Ass.
If you don’t know what that means it is from 1960’s and describes many of the posters on this site.
FYI, it’s a mistake bordering on delusional to think that China can march Mao’s long march now. Peasants no workee, pitchforks and warlords. 3500 years of Chinese Empire.
LOL – this isn’t a blink, this is eyes wide shut (well as much as his squinty eyes can shut over the bags).
Chairman Mao woo hoo! This is all like the house of mirrors with Bruce Lee chasing evil one arm guy.
No comment.
The End.
What are the odds we end up more dependent on Chinese industry at the end of Trump’s term than at the start, given this clownish incompetence?
depends on mid terms elections
if dems win lower house. all tariff BS will stop.
I totally disagree with Trump’s methods, but practically, what is to be done? Running both a budget deficit and trade deficit for decades, while the economy grows at a lower rate than the debts being accumulated, will result in an impossible position, surely? Mathematically, it’s impossible to have forever increasing debts. At some point it will collapse. Get rid of tariffs to simulate the economy, but if all you have is ever growing trade deficits, surely this is not the answer?
= what is to be done? Running both a budget deficit and trade deficit for decades
buddy, IT IS OVER. nothing will be done. or can be done!
just save yourself.!
debt 37 tlrn$. by end of trump 4 years, it will be 45 trln.
assuming 4*5 % rate, it will be about $ 2 tlrn servicing per year
USA gov collects 4*4.5 tln per year
it is BANANA REPUBLIC ON STEROIDS.
Quite a bit can be done.
Put money in the hands of consumers at the lower end of the socio-economic world through decent wages for actual work. The lowest members of society spend as fast as they can and the money has high velocity and is taxed many times as it “Trickles UP” to the investor class that simply sits on capital in dividend/interest paying equities.
The last budget surplus was during the Clinton administration and it can be done again with reasonable tax rates that are transparent and reliable.
No need for insane tariffs that are in fact “Regulations” that drive manufacturers to high cost raw materials or high cost labor.
Continue to live with a big trade deficit because it exports the dollars that are re-patriated through purchases of treasuries.
Trump and his sycophants have it all wrong. Crushing the economy lowers tax revenues and the velocity of money.
Get rid of the budget deficit by cutting spending and increasing taxes. Fix the budget deficit and the trade deficit fixes itself because foreign countries will have to trade their dollars for US products instead of debt. It is really simple. Except no American is patriotic enough to pay higher taxes. America isn’t worth it.
Well, I know you are aggressively rooting for China, so congratulations?
I am rooting for free trade, against trade idiots, etc.
By the way, the markets are cheering too. No more, no less.
Clowns support people instead of policies.
Do the Chinese trade fairly and/or freely with us or anybody?
Correct me if I’m wrong… Free trade is great if all (or almost all) else is also fair and equal and “level-playing field”, etc. But with the current situation, you can’t create more American factories (“more” of them would create a competitive environment and lower domestic prices too), to compete with the Chinese. Especially when defective, even dangerous Chinese products have 5-star fake ratings on Amazon. How can you have free trade when one major player cheats… when even the regulatory environment is so different and so differently enforced.
The assumption that “free market will cure all” is based on “humans can live for 100,000 years, therefore they can keep trying bad products until they find the good one“.
Nobody has enough life to wait for a global free market to align itself, when you have strong political biases and different mentalities / regulations / enforcement among major players.
I don’t have enough life to wait until my neighbor realizes magically that running leaf blowers every day, even in the winter (to blow snow and dust in his backyard!) is pointless. Many times, an intervention is required.
Current US advantages will not last for long if the US doesn’t make and trade its own products.
It’s a dangerous fantasy to assume that Americans will do “mostly research” (la-di-da) and the Chinese will do “only production” forever. It’s along the lines of thinking Greeks had from 1985 to 2005 that “the Germans will produce and we will just consume”. They seriously thought like that, and they had articles and PhD economists on TV shows to support it (!).
Something has to be done Mish. If you think your solution is good, ask for a hearing before Congress or some Committee etc.
=e aggressively rooting for China,
did you VOTE for Bush jr twice? if yes, you are too responsible for 500 000 dead kids in iraq!!!
Maybe wait to see if something is substantiated or not before posting fake news.
Update 10:15am ET: Just minutes after the WSJ report (below) sparked another boost to stocks shortly after the close, Reuters has poured cold water on risk sentiment reporting that any tariff cuts would only take place pending talks with Beijing and would not be unilateral but in conjunction with China talks:
Of course it’s bullshit
Because no one can possibly believe a proven liar who does not honor his own deal.
Nonetheless, it’s still a white flag by Trump. He is trying to find a way to save face.
Wait so now its bullshit? Own deal? What deal did we not honor with China? How about the deal that they did not honor with regards to agricultural purchases which was not enforced by Biden? Your agenda and bias are tiring.
Bye – You are tiring. I have had enough
Is this part of the ‘art of the deal’?
Of Course
It’s also 8D chess
Maybe Judo is a better metaphor. And you have the added plus for the Orange Man Bad crowd here since Putin practices Judo.
… played by a flock of pigeons.
You have bow become unreadable for your lack of critical thinking.
Deleting your Site. Good day Sir, and I hope your health recovers.