Trump and tariffs: The art of backpedaling

In Donald Trump’s lexicon, there are certain words that are repeated so often that they eventually lose their meaning. “Historic” is one of those words. His administration overused it again Monday, calling the agreement reached last weekend in Switzerland between the United States and China — which will bring about a 90-day truce in the trade war that the two powers had engaged in at Trump’s initiative — “historic.”

It’s undoubtedly a significant agreement: it provides a breather to businesses and consumers on both sides of a trade relationship that totaled $660 billion last year; Chinese ships will return to the Port of Los Angeles; Americans will be able to consume cheap products from Asia; and the markets, which saw significant gains on Monday, finally breathed a sigh of relief. But... is it really a historic pact?

The adjective seems exaggerated considering that it actually solves a problem created by Trump himself almost six weeks ago, on April 2, when he decided to unilaterally impose tariffs on dozens of his trading partners in a televised event from the White House lawn. China was slapped with a 34% tariff on most of its products, adding to the 20% levy already in place to pressure three countries (in addition to the Asian giant, Mexico and Canada) into complying with the goal of halting the trafficking of fentanyl, a powerful opiate responsible for three-quarters of overdose deaths in the United States.

That rate grew over the following week, amid the poker game between Washington and Beijing, until it reached the 145% imposed by the United States on China, which in turn imposed a 125% tax on American imports. Following the Swiss talks, Washington’s tariffs on Beijing remain at 30%: that is, the base 10% universal tariff, plus an additional 20% because of China’s alleged export of fentanyl precursors. Trump warned at a White House conference that the 25% tariff on steel, aluminum, and automobiles that also applies to those sectors in other countries will remain in place.

The money Trump hoped to raise with his tariffs — another key term in his lexicon, “the most beautiful word to me in the dictionary” — will have to wait. The president had already lifted the tariffs — which he erroneously calls “reciprocal” and which he had imposed on dozens of trading partners — on April 9, to leave them with that “base” 10% tariff. He also gave those countries 90 days to reach new trade agreements with Washington. That day, he predicted that the deals would come quickly, because all those countries were eager to please him (or “kissing my ass,” he said, to be more precise).

The decision to ease up on his threats was made in light of market pressure, the effects of his aggressive policies on public debt and the dollar, and criticism and pleas from within his own Republican Party, as well as from business leaders and investors. Trump and his allies argued at the time that what had just happened was not so much an on-the-spot repentance, but the fruit of a pre-planned strategy: that Trump was simply putting into practice the business acumen he often boasts about.

He calls it “the art of the deal,” a phrase he used as the title for his first memoir, The Art of the Deal. Given the way things are going on the economic front during his second presidency, it’s tempting to think that the art of the deal is, above all, the art of backpedaling.

Low expectations

Of the 90 days granted to all countries except China, 33 had already passed by Monday and so far the White House has only been able to announce a partial trade agreement with the United Kingdom. This occurred last Thursday, in a joint telephone appearance by Trump and British Prime Minister Keir Starmer, who hailed it as, once again, “historic.” Not only that: he even compared it to the announcement made by Winston Churchill on that same day 80 years earlier to certify the Allied victory over Nazi Germany and the end of World War II in Europe.

Members of Trump’s economic team had spent the previous days eager to show some progress in the negotiations, hinting that agreements with India, Japan, and South Korea were imminent. Those agreements are still expected. They also secured the Geneva meeting with China and then tried to pass it off as an initiative put forward by Beijing, which denied that it had sought to meet on neutral ground. According to U.S. media reports, Trump was in a hurry to secure this pact with China so he could pack it in his suitcase on the first foreign trip of his second presidency. He left Monday, headed for Saudi Arabia, Qatar, and the United Arab Emirates, to seal lucrative economic deals.

On Friday, the day before the meeting in Switzerland, Trump launched a sounding balloon with a message on his social media platform, Truth, in which he said that lowering tariffs on China to 80% seemed “fine” to him. Once again, he implemented another of his strategies: arriving at the negotiating table with low expectations and then — aided by the secrecy of talks at the U.S. embassy in Switzerland — passing off what for now is just another postponement to further talks as a great victory.

It remains to be seen whether at the end of that 90-day period the two powers, which already engaged in a tug-of-war during the first Trump administration, will reach a substantive trade agreement; this precedent indicates that something like this will take longer. It also remains to be seen whether the Geneva meeting has succeeded in “completely opening the Chinese market,” as the U.S. president stated in an appearance Monday at the White House — for another “historic” announcement aimed at lowering the prices of certain medications.

Analysts were more skeptical than the U.S. president, agreeing that China emerged better-off from its trip to Switzerland, among other reasons because it’s unclear what advantage the United States gains from the agreement beyond solving a problem of its own making. Ryan Sweet, chief U.S. economist at Oxford Economics, believes the pact doesn’t address the uncertainty created by Trump’s tariffs. It’s also unclear how his administration plans to negotiate case-by-case with dozens of countries simultaneously over a three-month period.

For now, it seems that Scott Bessent, who led the delegation in Geneva, has gained ground as the president’s right-hand man on the trade front, surpassing other tariff hooligans like Peter Navarro, dubbed “the White House trade adviser who hates trade,” or Howard Lutnick, the Secretary of the Treasury.

If Bessent, a more moderate (so to speak) politician, manages to get Washington out of the quagmire in this self-inflicted trade war, Trump will have no choice but to invent new words. The adjective “historic” will fall short of describing the feat.

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