Trump And Treasurer Bessent Admit Tariffs Are 'Unsustainable' As US Capitulates To China Again, But Now Floats Raising New Tariffs On Other Countries
Bessent said in an interview, “Nobody thinks these tariffs are sustainable in the long run.”
The U.S. trade war it has launched against China and the rest of the world has certainly been both confusing and interesting to say the least. I have not talked about this as frequently for this reason, but in this report I will briefly go over some of the more salient points that have transpired this last month or so to date.
As a reminder - in April, after Trump’s Liberation Day when he levied sweeping tariffs on the world in a jumbled tariff formula (basically the trade deficit divided by imports, or a baseline of 10%), roughly a week later the U.S. dialed back the scope of the tariffs on Chinese imports in a number of sectors, exempting a number of tech and appliance sectors, manufacturing and auto parts, and other items. Trump adviser Stephen Miller later clarified that these items are still "subject to the tariff under the original IEEPA on China of 20 percent."
Last week, President Trump and Treasury Secretary Scott Bessent touted a new “deal” with China, a deal that involved the rescinding of more of those hefty tariffs on China. The White House touted this as the “Art of the Deal.”
The initial agreement announced by Bessent and Trade Representative Ambassador Jamieson Greer was a 90-day pause, and “both sides, on the reciprocal tariffs, will move their tariffs down 115%,” Bessent said.
Following the initial statement, the agreement reduced levies on most Chinese imports from 145% to 30% along with China reducing its 125% tariff on U.S. goods to 10%.
The White House further stated:
The United States will suspend its 34% reciprocal tariff imposed on April 2, 2025 for 90 days, but retain a 10% tariff during the period of the pause.
The 10% tariff continues to set a fair baseline that encourages domestic production, strengthens our supply chains and ensures that American trade policy supports American workers first, instead of undercutting them.
By imposing reciprocal tariffs, President Trump is ensuring our trade policy works for the American economy, addresses our national emergency brought on by our growing and persistent trade deficit, and levels the playing field for American workers and producers.
Unlike previous administrations, President Trump took a tough, uncompromising stance on China to protect American interests and stop unfair trade practices.
Though the Trump administration touted this as a win and a deal, China interpreted this as a win for them as well.
“China’s firm countermeasures and resolute stance have been highly effective,” reported a social media account tied to China’s national broadcaster CCTV. A Chinese social media user, Chun Feng Yi Ran, posted: “Our ancestors didn’t cave in, why should we give up what we have?” The comment garnered thousands of likes, CNBC noted.
However, the White House’s claims of a “cooling down” period are still a bit disingenuous. As noted by Michael Snyder at The Economic Collapse, the author pointed out that Jason Miller admitted what really happened is “we have 50% tariffs on China, they have 10% on us.” This metric comes by adding the 10% baseline tariff rate on top of the 20% fentanyl tariff rate plus the 20% tariff rate from Trump’s first term.
This is confirmed on the White House website:
The United States will remove the additional tariffs it imposed on China on April 8 and April 9, 2025, but will retain all duties imposed on China prior to April 2, 2025, including Section 301 tariffs, Section 232 tariffs, tariffs imposed in response to the fentanyl national emergency invoked pursuant to the International Emergency Economic Powers Act, and Most Favored Nation tariffs.
In short, the real current tariff rate against China is 50%; and Bessent noted after the latest discussion this is the new “floor.” “In other words,” Snyder wrote, “even if a permanent trade deal with China is reached, we shouldn’t expect the tariff rate on Chinese imports to go any lower. […] So things are never going to go back to the way they once were” - that is, assuming the Trump administration does not flip-flop again some more later this year.
Snyder added:
“Tariff rates have been temporarily slashed by both sides for a period of 90 days. Does that put us in a better position than last week? It most certainly does.
“But the tariff rate on Chinese imports is now far higher than it was just a couple of months ago. That is not good news at all.
“Prices on thousands upon thousands of products that we import from China will be going up. In some cases, the price increases will be quite dramatic. Those that are on the bottom levels of the economic spectrum will be hit the hardest. If you shop at Walmart, Target, Home Depot or at any of our dollar stores, you will feel the pain.”
John David Rainey, Executive Vice President and Chief Financial Officer at Walmart, recently admitted that prices of goods will go up because of tariffs, noting that even though a number of certain sectors will be dramatically hit the most, the tariff costs will most likely be dispersed across most items sold at stores. In other words, most things at Walmart will see another bump higher in prices.
Prior to this “deal,” the U.S. had already admitted weeks prior that the tariffs were not “sustainable” and would come down soon. Bessent said in an interview on April 15th: “Nobody thinks these tariffs are sustainable in the long run.”
Around this time, Trump also said that high tariffs on Chinese imports would come down. "145% is very high, and it won't be that high," Trump said. "No, it won't be anywhere near that high. It'll come down substantially. But it won't be zero ‒ used to be zero. We were just destroyed. China was taking us for a ride."
Elon Musk also shared his frustration with the tariff policy at the time. Former White House trade adviser Peter Navarro, who reportedly is the mastermind and fall guy behind Trump’s Liberation Day tariffs, was referred to as “Peter Retardo.” This came after Navarro told CNBC that Musk was “not a car manufacturer” but “a car assembler,” claiming Tesla relies too heavily on imported parts. Musk retorted back, writing, “Navarro is truly a moron. What he says here is demonstrably false. Tesla has the most American-made cars. Navarro is dumber than a sack of bricks.”
Prior to the China agreement, days before that, the U.S. touted a new “breakthrough” trade deal with the United Kingdom, an announcement that basically came and went. The U.K. is America’s 9th largest trading partner. But the baseline 10% tariff on U.K. goods is still in place save for a few sectors.
The Wall Street Journal indicated that the 10% tariff rate is the new baseline as the U.S. has become a protectionist country. The paper wrote:
If you had been told a year ago the U.S. would impose a 10% tariff on its oldest, most stalwart ally, you would have assumed something had gone horribly wrong between the two. That both are hailing this as a good outcome—and the stock market seems to agree—tells you how much the landscape has shifted.
The U.S. is now a high-tariff, protectionist country. Trade deals will be judged not by how much barriers go down, but by how much they go up. This might ultimately look like a British victory if other countries come out worse.
The “10% baseline is here to stay—if the U.K. isn’t getting down to zero, it is very unlikely that anyone is,” Sarah Bianchi, an analyst at Evercore ISI who was a trade negotiator under President Biden, wrote in a note to clients Thursday.
[…] The costs will be bearable; the U.S. takes only 16% of British exports. And if other countries end up with higher tariffs, that will mitigate any loss of market share.
The WP noted in April that according to reports, moving forward, even if countries were to lower their tariff rates to 0% the U.S. would not do the same for them in return, implying that ‘fair trade deals’ by this administration’s standards are taxes on foreign imports but none on American exports.
Fast forward to more present times - the administration is now signaling a reshuffling of new tariff rates for countries going forward.
“At a certain point over the next two or three weeks, I think Scott [Bessent] and Howard [Lutnick] will be sending letters out essentially telling people – it will be very fair – but we’ll be telling people what they’ll be paying to do business in the United States,” he said.
President Trump also claimed a couple of weeks ago that he “can announce 50 to 100 deals right now” on trade “because I’m The Shopkeeper.” At one point Trump was claiming he had “200 deals” lined up and waiting, but apparently had to drop that number down.
However, Trump would later express frustration when being asked about how many “deals” are being signed or announced.
AUTHOR COMMENTARY
The red hat roller coaster is truly an interesting ride. We have been told everything under the sun about tariffs:
Trump tells us that tariffs are his “favorite word in the dictionary;” tariffs are going to “make us rich;” countries are “ripping us off” and they are going to pay; tariffs will bring back manufacturing and jobs to the U.S. as part of this Golden Age of America; to then it turns into the real goal is to isolate China; to, ‘well, we weren’t serious, these were just negotiating tactics to bring nations to the table;’ to subtle admissions that the importers and consumers pay these new taxes, not countries; to then admissions that they are not sustainable.
James 1:8 A double minded man is unstable in all his ways.
So, I ask the question to the red hats, are you tired of winning yet? Yet the diehards continue to eat crow and change their own philosophy in order to “trust the plan” in this crazy cosmic game of 20-D chess or whatever.
The tariffs achieve in crushing small and medium businesses, and what remains of the middle and lower classes.
Readers will recall that I was critical of these tariffs last year when Trump campaigned on them; and I mention this to remind new readers that I am not just a bandwagon Trump-hater: I exposed this nonsense for what it was then, and it has proven true.
Proverbs 26:6 He that sendeth a message by the hand of a fool cutteth off the feet, and drinketh damage.
It is important to remember that Trump officials have also said that this is part of a massive restructuring campaign for the economy and country. Indeed, that has been the case because this is, as far as I am concerned, a systemic collapse and controlled-demolition of the current system.
One commenter on ZeroHedge, who says he is in manufacturing, explained how, in his opinion, manufacturing is not coming back:
He’s right: it’s not going to happen. Tariffs alone will not do this; it will take at least an entire generation of investment and education for this to happen. This tariff tripe only hurts us; but I am convinced that is the goal.
[7] Who goeth a warfare any time at his own charges? who planteth a vineyard, and eateth not of the fruit thereof? or who feedeth a flock, and eateth not of the milk of the flock? [8] Say I these things as a man? or saith not the law the same also? [9] For it is written in the law of Moses, Thou shalt not muzzle the mouth of the ox that treadeth out the corn. Doth God take care for oxen? [10] Or saith he it altogether for our sakes? For our sakes, no doubt, this is written: that he that ploweth should plow in hope; and that he that thresheth in hope should be partaker of his hope. (1 Corinthians 9:7-10).
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These "leaders' or so they say, have a giant dart board, with words instead of numbers like tariffs and inflation and such and they just throw darts at it and where it lands; that what happens, whether it makes sense or not. They have no clue
Merica is a great big "clump" circling the rim on its way to the sewer which is sad to say but true.
Head Games. Trump is a duck that quacks - as in lame duck. MAGA was illusory, and the average American is on their own without representation, a requirement of performance required from remote governments.