Trump should just declare victory on tariffs and pivot exclusively to China
President Trump should accept the "win" on tariffs, retreat from most of them, and focus all his energy on China, which was the real target all along, as the U.S. can afford to do this due to being the world's biggest consumer.
A couple of weeks ago you couldn’t turn on the television or read a news story without the words “trade war” jumping out of it. The economy was in “free fall” and the stock market was going to kill us all.
Whatever happened to all that? Reality, as it always does, inserted itself. Things returned to normal, at least for now. It’s time for President Trump to follow suit, accept the “win” on tariffs, retreat from most of them and focus all his energy on China, which was the real target all along.
As I write this on Tuesday, the S&P 500 index is down less than 1 percent from where it was a month ago. The Dow is off by less than 3.5 percent. That’s not nothing in either case, but it’s closer to nothing than it is to the apocalypse we seemed to be facing on "liberation day."
But the truth is, everyone wants to sell to the U.S. Nations big and small are looking to please the U.S. on the issue of tariffs by eliminating theirs on our goods.
I suspect the point of all of this was to put pressure on China, the biggest of the Big fish. Picking an indirect trade dispute with China is a much better strategy than going at it directly. When the Chinese raised their tariffs even higher in response to Trump’s move, it was game on.
Everyone else's tariffs were “paused,” as countries that didn’t respond in kind to Trump’s original action saw everything revert to normal. Not so in the case of China, which I suspect was always the target of Trump's tariff policy.
China was always going to be the focus. Trump has been unambiguous about that since 2015, but he played his tariff cards in such a way as to make the confrontation seem organic rather than deliberate. China took the bait.
The U.S. can afford to do this because we are the world's biggest consumer — nearly every other country on the planet needs to trade with us more than we need to trade with them. Besides, the “hit” we took at the beginning of April was only temporary.
China is not in a great position to weather such a hit. Before any of this jousting over tariffs began, its economy was already being teetering, thanks to massive real estate and local government debt crises.
That’s why Trump should declare that the tariffs have served their purpose with the rest of the world. He should obtain free trade agreements with everyone else, and then focus from this point solely on China.
Congress is where taxes originate. Any prolonged actions by Trump without Congress on board will likely be overturned, at least temporarily, by some judge somewhere.
The point was made, the muscles flexed, and prices risked rising. Some Amazon sellers, according to CNBC, have already increased prices for products from China, which should not surprise anyone.
But China and goods from there, ranging from electronics to pharmaceuticals, are the point. It is in our national interested to re-shore the supply and production of many of those.
I can’t be the only person who remembers being at the mercy of foreign countries, particularly China, at the start of COVID. Back before we knew the relatively mild impact of it on most people, we saw everything from China slow down.
We had politicians pledging to bring back the production of medicines, particularly antibiotics. During the Biden administration. Not much appears to have been done about that. But the second Trump administration appears to be making good on that need, or at least trying to.
Add to that the possibility, even probability, of forced labor being involved in the manufacturing of anything coming out of China, and the idea of “fair trade” becomes a literal moral imperative.
We are in a good place right now, economically, but not yet great. The saber-rattling served its purpose with very little long-term negative impact on Americans. So let's pull it back before there are more grave negative consequences.
Let's finalize those 200 bilateral trade deals Trump is talking about and focus on getting a better trade agreement with China. If any of the other talks fall apart, tariffs can always be threatened again, but China needs to be the focus. Trump has steered the discussion to where he wants it, on his terms. It’s time to shut out the noise so he can close the deal.
Derek Hunter is host of the Derek Hunter Podcast and a former staffer for the late Sen. Conrad Burns (R-Mont.).
