Trump’s conflicting statements confuse tariff picture—is it ‘strategic uncertainty’ or is he unclear what he wants?
More President Donald Trump Talk about his efforts to conclude agreements with American trade partners, the more confused the pricing image. His team seems good with this, saying that Trump uses “strategic uncertainty” to his advantage.
Trump says the United States does not have to sign any agreement and that it could sign 25 at the moment. He says that he is looking for fair offers on all sides and that he does not care about the markets of other countries. He says that his team can sit down to negotiate the terms of an agreement and that he could simply impose a set of prices on himself.
“I find it difficult to give meaning,” wrote Chad Bown, a principal researcher at the Peterson Institute for International Economics.
On Wednesday evening on his social media site, Trump wrote that he would hold a press conference Thursday morning concerning a “major trade agreement with representatives of a large country and very respected”. He added that it would be “the first of many !!!”
Although Trump's team has its best -selling book “The Art of the Deal” as proof that it has a master plan, a large part of the world is on tent dishes. This has indicated a volatile stock market, hiring gels and all kinds of uncertainty while Trump continues to promise that new factories and jobs are on the horizon.
An overview of how commercial discussions can take place:
Trump still wants prices
As part of any agreement, Trump wants to maintain some of his prices in place. He believes that import taxes can generate massive income for a strongly indebted federal government, even if other countries see the interest of concluding an agreement such as getting rid of prices.
“It's a great thing for us,” said Trump recently about prices. “If you can use them, if you can get out of it, it will make us very rich. And we will reimburse the debt, we will reduce your taxes considerably because so much money will be taken in that we will be able to reduce your taxes even beyond the tax reduction that you will get.”
So far this year, the US government has collected $ 45.9 billion from prices, about 14.5 billion dollars more than last year, according to the Bipartisan Policy Center. These income could significantly increase the reference rates by 10%, the rate of 145% being billed on Chinese products and rates up to 25% on imports in steel, aluminum, car and Mexican and Canadian.
To achieve Trump's declared objectives to repay the debt of $ 36 billions of dollars and reduce income taxes, its prices should raise at least $ 2,000 billion per year without the economy crashed in a way that leads to a drop in overall tax revenue. It would be almost impossible mathematically.
How do negotiations work?
The republican administration said that 17 of its 18 main trade partners have essentially presented them with mandate sheets, which list the possible compromises that they are ready to do. Accepting a mutual understanding of terms would only be the beginning of any commercial presentation.
But foreign leaders said that it was not clear exactly what Trump wants it or how agreements could be codified in a lasting agreement. They also know that Trump approved the agreement of the United States-Mexico-Canada in 2020, to charge new prices on these same two business partners this year.
While meeting Trump on Tuesday,Canadian Prime Minister Mark Carneysuggested that the next version of this agreement should be reinforced to prevent a rehearsal of the prices linked to fentanyl imposed this year by Trump that Canada considered arbitrary.
“Some things about this will have to change,” said Carney.
Can the United States conclude an agreement with China?
145% prices on China– and the 125% tariffs on the United States that Beijing imposed in response – hang throughout the negotiation process. The secretary of the Treasury Scott Bessent recognizes that these prices are not “durable”.
The first talks between the United States and China are ready toStart this weekend in SwitzerlandBut they will probably limit themselves to finding ways to sufficiently defuse tensions for significant negotiations to occur.
The key problem is that China is the dominant world manufacturer, which also makes it a leading exporter so as to supplant the national industries. Because China removes domestic consumption and focuses on production, the rest of the world buys what it does because there is not enough internal demand. The United States wants to rebalance trade, but it has also done so through prices on countries that could be its natural allies to defend its automotive and technological industries against China.
“Obviously, in this commercial puzzle, China is the largest room,” said Bessent this week. “Where do we end up with China?”
The Chinese Foreign Ministry spokesman Lin Jian suggested that a significant means for the Trump administration to relaunch talks would be to withdraw his rhetoric and taxes on punitive import.
“If the United States really wants to solve the problem by dialogue and negotiation, it should stop threatening and putting pressure on and engaging in dialogue with China on the basis of equality, respect and mutual benefits,” Lin said on Tuesday.
Asked on Wednesday if he would reduce the prices on China as a condition for negotiations, Trump said: “No.”
The president also challenged the Chinese government's statements that his administration asked for talks in Geneva. “Well, I think they should go back and study their files,” said Trump.
Should Congress approve agreements?
Not necessarily.
Trump unilaterally imposed his universal prices without congresses, using the international law on the emergency powers of 1977 to do so, which led to multiple prosecution. The administration also maintains that any agreement to modify the prices would not have required the approval of the congress.
Previously, the presidents, including Trump during his first mandate with his “phase one” agreement in China, could only negotiate “more limited agreements that have focused on certain bilateral commerce and pricing problems”, according to a research report of the Congress updated in April. Other examples of limited offers include a 2023 agreement on critical minerals and a 2020 agreement on digital trade with Japan.
The challenge is that Trump has also made non -caricate obstacles such as safety regulations for cars and value taxes billed in Europe part of its talks. He wants other countries to change their non-charitable policies in exchange for the United States to reduce the new prices he has introduced. Other countries, in return, could oppose American subsidies to its societies.
In theory, it would take the approval of the Chamber and the Senate to conclude an agreement which would address “non -tariff obstacles and require modifications to the American law,” said the Congressal Research Service report.
Is it really a matter if Trump simply imposes it?
If other countries fail to satisfy him, Trump has suggested that he would simply make a kind of internal offers and will establish a rate rate, although he has already done this with his “Liberation Day” prices of April 2. The import taxes announced by Trump then led to a financial market sale which led him to suspend some of his new prices for 90 days and to invoice the reference rate of 10% lower while the negotiations take place.
It seems that Trump agrees not to impose the prices originally if he thinks that other countries make adequate concessions, which essentially means that the United States abandons nothing because the prices are new. But Trump could also withdraw his prices without necessarily obtaining a lot of return.
“Trump is known to make maximalist requests, then withdraw over the negotiations, so we will see how long he sticks to his formula,” said William Reinsch, principal advisor to the Center for Strategic and International Studies, a Washington reflection group. “But so far, it is quite clear that the countries that arrive and wish a” normal “commercial negotiation with the two parties that make substantial concessions are repulsed.”
This story was initially presented on Fortune.com
