After the week of Bravuconería and Escalada, President Trump blinked. Then flicked again. And again.
He retreated his threat to fire the president of the Federal Reserve. His treasure secretary, very aware that the S&P 500 dropped 10 percent since Trump was inaugurated, said he was looking for a disaster out to avoid intensifying commercial war with China.
And now Mr. Trump has acknowledged that the 145 percent tariffs on Chinese products announced only two weeks ago are not sustainable. The warnings of the senior executives of Target and Walmart and other great American retailers that consumers would see increases in empty prices and empty shelves for some imported products in a few weeks were partly requested.
Trump’s encounter with reality was equivalent to a vivid case study in the political and economic costs of hitting the toughest lines. He entered this commercial war imagining a simpler era in which to impose punishment rates would force companies around the world to build factories in the United States.
The month ends discovering that the world of modern supply chains is much more complex than it negotiated, and that it is far from clear that their “beautiful” tariffs will have the effects that predicted.
This is not, of course, the explanation of the events of the last days that the White House is taking out. Trump’s AIDS insists that maximalist demands have an act of strategic brilliance, which forces 90 countries to align to deal with the president. You can take months, they recognize, see the concessions that will result. But folding the global commercial system to the American will, they say, it takes time.
“Have a little patience and see,” president’s secretary of the president, Karoline Leavitt, said Wednesday to journalists.
Mr. Trump himself insisted on journalists in the White House that everything agreed to plan.
“We have a lot of action in progress,” he said, repeating his line now that “we are not going to be a coffin that obtains the advantage of tasks in virtually all countries of the world.” He suggested again that the United States needed to return to the era of 1570 to 1913, the year in which the country was the country to impose income taxes, when the tariffs founded the government and “we had more money than anyone.”
And he repeated his prediction that “now we are going to make money with everyone, and everyone will be happy.”
But happy it didn’t seem to be the White House atmosphere in recent days.
He begins with Mr. Trump’s statement that the “termination” of the president of the FED, Jerome H. Powell, whom he appointed in 2017, “cannot come quick enough.” His highest economic advisor, Kevin Hasett, went further, saying that the administration was analyzing the legal options to eliminate it.
Mr. Trump’s complaint is that Mr. Powell will not reduce interest rates, for fear of stealing inflation. But the president was clearly concerned about the warnings of economists that the country could go to the recession, one of his own creations, one that his critics are already trying to label Trump’s fall just before it happens.
The tone of his comments seemed to suggest that if the recession comes, the fault will fall on Mr. Powell.
But once Mr. Trump declared “if I want to leave it, he will be out of there very fast, believe me,” another market sale was begged. He made little difference that he is not not the power to say goodbye to the Fed chair, as Mr. Powell has pointed out in recent days. The mere threat seemed to accelerate the feeling that the United States has become the greatest source of market instability in the world.
Then, Tuesday, Trump changed his tone. “I have no intention of saying goodbye,” Trump or Powell said. That did not prevent him from continuing his criticism of Mr. Powell as “Mr. Late” with rates cuts, but it was enough to reverse the sale of the market sale.
The next backs arrived with China.
The White House continued to hint that the Chinese were beginning to negotiate, looking for a way to end the tariffs. In fact, the strategy that Beijing seemed to follow was to wait for Trump to feel the pain of his own actions. President Xi Jinping’s expected phone call never arrived. And Mr. Trump didn’t want to be the first to call, a sign of despair.
During the week, the Treasury Secretary, Scott Besent, seemed in an obvious pain when trying to justify the application of tariffs that, according to many measures, exceed taxes by the Smoot -Hawley law in 1930 (it is a historical comparison that nobody in a false analogy, because the retaliation cycles caused that Congress Law worsened the great depression).
“No one thinks that the current status quo is sustainable” to those tariff rates, Besent told investors on a closed on Tuesday in Washington, where his comments were immediately leaked. He said he was looking for a decalciation with Beijing, that “I should give the world, the markets, a sign of relief.” But he admitted that any negotiation with China was going to be slow and painful, “a job.”
In private, some Trump officials concise that China’s reaction did not predict precisely. Trump seemed to expect China to reach their relief, given the size of their exports to the United States.
“In 2017, the first time Trump imposed tariffs on China, Beijing was caught by a relative surprise,” Nicholas Mulder, an economic historian of the University of Cornell, said Wednesday. “But they have leg preparation for greater escalation for many years,” he said. Now, “they have a lot of tender for economic pain and a greater ability to resist this increase.”
By Tuesday night, Mr. Trump was publicly reflecting the Chinese tariffs, saying that “145 percent is very high, and it will not be so high, it will not be so high.” He added: “He approached there”, as if the number had floated at that height by Itelf.
On Wednesday, Mrs. Leavitt said Trump would not reduce tariffs until the United States and China negotiated a new commercial agreement, another mixed white house about the state of negotiations.
“Let me be clear: there will not be a unilateral reduction in tariffs against China,” Leavitt said in Fox News.
Other powers are clearly observing the Chinese approach and bars notes. Mr. Xis closest, President Vladimir V. Putin de Russia, is dedicated to his own high -risk negotiation with the United States, on Ukraine. Iran is in the middle of the conversations about its nuclear program. They are looking for signs of weakness, or few indications of what Trump’s nerves could try.
Elizabeth Economy, Who has written extensively about Chinese Trade Policy and Served in the Commerce Department Duration the Biden Administration, Said the Trump Team Appeared to have ignored Three fundament Say Katit, and Sea Tool Katit, and Sea Tool Katit Katit, and Sealiatory Katit Katit, and Andy Toolery Katit Katit Katit tool, and Mr. XI’s ability to make the United States the scapegoat of China’s economic evils.
“This chicken game has done nothing more than Xi Jinping to boost its position inside and outside China, while the United States seems uninformed and without Moored,” he said.
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