No Divorce From China
Disentangling would cost too much: “Neither side wants to decouple,” said Treasury Secretary Scott Bessent on Monday, a reversal from the Trump administration’s line that we needed to lessen supply-chain dependence on China for national security reasons. Earlier this week, the U.S. and China agreed to a deal that would bring American tariffs on Chinese goods down to 30 percent, from 145 percent, while China will bring its tariffs on American goods down from 125 percent to 10 percent. This is a temporary pause for 90 days while further deals are negotiated.
“Finally we have a President that will stand up to China’s unfair trade practices,” Secretary of State Marco Rubio had said when the original tariffs were announced a month ago. But also: “We concluded that we have shared interests, and we both have an interest in balanced trade,” said Bessent this week. Which is it?
The part that’s not said: The Trump administration very nearly drove the economy into the ground, and they got scared and have now backed off.
“Both sides are trying to portray it as the other was more desperate,” Nicholas Borst, director of China research at an investment advisory firm, told Politico. “What we saw, though, was just sort of the initial innings of economic pain.”
But is this trade relationship any better than the one we had in March, or February, or January? It’s not clear that this is much of a win, and even a 30 percent tariff still leaves lots of companies in the lurch.
Has China made any concessions in a way that’s superior to the pre-April 2 status quo?
— Joe Weisenthal (@TheStalwart) May 12, 2025
Some people, including a former Trump administration official speaking to Politico, speculate that China’s threatened rare earth cut-off was more damaging to automakers and the defense industry than anyone’s letting on, and that China actually can log this one as a W; “China’s export restrictions to the United States worked. It created enough pain to compel the U.S. government to plead with the Chinese government to reverse course,” the official told Politico.
Cal
Article from Reason.com
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