On the menu today: If you’re going to get into a trade war with China — easily justifiable considering the Beijing regime’s abuses and belligerence on a wide variety of fronts — you had better have a plan. Trump likes to quote Mike Tyson, “Everyone has a plan until he gets punched in the face,” but this philosophy leads to a lot of ad-hoc, erratic, capricious, and mercurial decision-making and unexpected reversals. This is how we ended up with five new U.S. tariff rates on Chinese goods in less than 90 days, with at least one more expected shortly. Continuing the widely contradictory administration messaging about tariffs and the ongoing trade war with China, Trump touted the virtues of tariffs on Sunday, and then he and Treasury Secretary Scott Bessent spent Monday assuring everyone that the tariffs on China would “come down considerably.” To paraphrase Mark Twain or Will Rogers (or someone else), if you don’t like the U.S. tariff rate on imported goods, just wait a few minutes.
The Trade War Merry-Go-Round
Follow the bouncing tariff rate . . .
- The U.S. tariff rate on Chinese imports on January 20, 2025: 20.8 percent. This applied to 66 percent of all Chinese goods imported into the United States. (All figures from the Peterson Institute of International Economics, but they’re just getting their data from the Office of the U.S. Trade Representative.)
- The U.S. tariff rate on Chinese imports on February 4: 30.8 percent. This is because President Trump imposed new tariffs of 10 percent on all imports from China under International Emergency Economic Powers Act.On February 10, the tariff began applying to 100 percent of Chinese goods imported into the United States.
- The U.S. tariff rate on Chinese imports on March 4: 40.8 percent. Trump imposed additional tariffs of another 10 percent on all imports from China under IEEPA.
- The U.S. tariff rate on Chinese imports on March 12: 42.1 percent. That increase, just two days later, is because of new U.S. Section 232 tariffs imposed on steel, aluminum, and derivative products.
- The U.S. tariff rate on Chinese imports on April 10: 134.7 percent. On April 9, Trump announced new tariffs ranging from 1 percent to 74 percent imposed on nearly all countries with a trade surplus with the US, including China (74 percent). Under IEEPA, the new U.S. tariff on China included an additional 50 percent tariff as counter-retaliation for China’s retaliation announcement.
- The U.S. tariff rate on Chinese imports on April 12: 124.1 percent. The U.S. removed some additional tariffs imposed under IEEPA on April 5, 9, and 10, carving out some additional products that contain semiconductors.
Trump has been in office for 94 days including today; in that time, the tariff rate on Chinese goods has changed five times. We’ve seen more stability and predictability in Sybil.
And in the Oval Office yesterday, Trump indicated a sixth change is coming soon.
“145 percent is very high,” Trump said. “It won’t be that high. No, it won’t be anywhere near that high, it will come down substantially, but it won’t be zero.”
Keep in mind, at 4:05 p.m. on Easter Sunday, Trump jumped onto Truth Social and offered another ALL-CAPS missive: “THE BUSINESSMEN WHO CRITICIZE TARIFFS ARE BAD AT BUSINESS, BUT REALLY BAD AT POLITICS. THEY DON’T UNDERSTAND OR REALIZE THAT I AM THE GREATEST FRIEND THAT AMERICAN CAPITALISM HAS EVER HAD!”
And then on Monday, Treasury Secretary Scott Bessent gave a private speech in Washington for JPMorgan Chase, declaring a trade war against China “unsustainable” and that he expects a “de-escalation.”
I am largely in agreement with Michael Brendan Dougherty that those of us who generally support free-trade have to consider other factors when it comes to China — the national security threat they present, their longstanding and widespread use of slave labor and forced labor, their indisputable dumping of certain products like steel in foreign markets by selling them at less than the cost to produce them, intellectual property theft, the country’s abominable human-rights record, the overt threats to invade Taiwan, sending a spy balloon over our country, and a litany of other factors that make it clear that U.S. economic dependence upon a vast country run by a hostile regime, running on exploited labor, is not in our interests. (Don’t worry, I haven’t forgotten my signature work.)
As mentioned previously in this newsletter, we need to economically decouple from China. There are a lot of circumstances where Trump’s reflexive “we’re getting screwed on trade deals, other countries are taking advantage of us” stance on trade is nonsense. But on China, he’s right. You can justify higher tariffs on Chinese goods as a punitive or retaliatory measure, as a deterrent against further dumping, as a national security measure, and so on.
Of course, if you enact higher tariffs on China, you should be ready for Chinese retaliation; up until April 11, the Chinese tariff rate on U.S. goods was 22.6 percent; starting April 12, the rate skyrocketed to 147.8 percent. China’s turning away planned shipments of Boeing planes, U.S. automakers are freaking out about more expensive parts from China, and China is warning other countries not to economically cooperate with the United States. They’re also attempting to fast-track the training of semiconductor engineers. (I’ll bet I recently hung around a couple of those future semiconductor engineers last week; eleven high-school teams from China participated in the First Robotics Competition championship in Houston.)
As justifiable as a tougher stance on Beijing is, the Trump administration creating a new tariff rate on Chinese goods roughly every 19 days, followed by a pledge of a climbdown, does not create a sense that there’s a coherent plan at work here.
Back on April 13, appearing on Meet the Press, White House trade adviser Peter Navarro boasted, “We’ve got 90 deals in 90 days possibly pending here.” The 90-day period began at midnight April 9, and unless extended, will expire July 8.
But just two days later, the administration’s statement emphasized that “more than 75 countries have already reached out to discuss new trade deals.”
Yesterday, White House Press Secretary Karoline Leavitt said the Trump officials had met with representatives of 34 countries and now has “18 proposals on paper” for trade deals following its latest tariffs.
Now the White House is indicating that within 90 days, they won’t have full trade deals negotiated but will have established “architecture” for a future deal:
The White House is closing in on general agreements with Japan and India to stave off massive U.S. tariffs, but they are likely to leave many of the thorny details to be hashed out at a later date.
In the absence of full-fledged trade deals, administration officials are working to ink what three people close to the White House described as “memorandums of understanding” or a broad “architecture” for future deals. They were granted anonymity to discuss the details of internal deliberations. . . .
“I wouldn’t even call them deals,” another person close to the White House said of the frameworks the administration is looking to announce. “Basically, [it’s] an agreement that we would like to talk about doing a deal.”
“They’re going to start rolling out a bunch of stuff that just says, you know, we’re signing something that says we’re going to start talks,” they added.
In about two weeks, we’ve gone from 90 deals in 90 days to an undetermined number of pledges to have further talks.
A few paragraphs ago, I alluded to the lab-leak theory regarding the Covid pandemic.
Trump also said yesterday he would not mention the pandemic or the evidence pointing to a lab leak in his conversations with Xi Jinping:
“No, I’m not going to mention COVID. I’m not going to say, ‘Oh, I’m going to play hardball with China, I’m going to play hardball with you, President Xi.’ No, we’re going to be very nice,” “We’ll see what happens. But ultimately, they have to make a deal, because otherwise they’re not going to be able to deal in the United States. And we want them involved.”
For a guy who’s allegedly so tough on America’s rivals and enemies, Trump sure seems conciliatory to Xi Jinping.
ADDENDUM: Over in that other Washington publication I write for, a look at how New York Governor Kathy Hochul was tempted to delay a special U.S. House election, how Texas Governor Greg Abbott actually did it to keep a congressional district without a congressman for eight months, and how Michigan Governor Gretchen Whitmer is doing the same for a state senate election in her home state. Sometime democracy dies in darkness, and sometimes some elected official attacks it with a chainsaw in broad daylight.