Trump 2.0 official thread

[arthur2046]

Before the "reciprocal tariff" he did other tariffs on some select countries like China (20%), Canada and Mexico on the pretext of stopping fentanyl import. These are not rolled back for this agreement. China did not do retaliatory tariffs for these.

Regarding the 20% fentanyl tariffs, China at the time imposed additional tariffs of 10% to 15% on certain goods and placed several companies on export control lists. These retaliatory measures were not revoked in the latest agreement.

 

[FriedButter]

Regarding the 20% fentanyl tariffs, China at the time imposed additional tariffs of 10% to 15% on certain goods and placed several companies on export control lists. These retaliatory measures were not revoked in the latest agreement.

A return to the climate of pre-April 2 in terms of tariffs.

I think this deal will hold. Trump and his team was looking at the numbers and impact the tariffs was going to have on the economy. We were looking at depression level of impact. Not to mention what was happening in the bond market. Last week bond yields were going up. Bessent is trying to figure how to calm bond holders that treasuries are a safe haven. This de-escalation may calm the bond market in the short term although the Trump tax cuts is going to balloon the deficit even more in 10 years.

Likely up to 2027 at least. Assuming MAGA doesn’t try anything stupid again. The mid-terms is getting closer and with the GOP slim majority then fanning the global economic war flame again could be disastrous. Chances are the Trump Admin is going to back track most of their global circus show with small baseline tariff and some additional market access. Falling extremely short of his promises.

 

[AndrewJ]

A return to the climate of pre-April 2 in terms of tariffs.



Likely up to 2027 at least. Assuming MAGA doesn’t try anything stupid again. The mid-terms is getting closer and with the GOP slim majority then fanning the global economic war flame again could be disastrous. Chances are the Trump Admin is going to back track most of their global circus show with small baseline tariff and some additional market access. Falling extremely short of his promises.

I think Trump's idea is making China buy more US goods & services. That's where negotiations will happen. China may agree on that, that's not necessary a bad or impossible thing for China. Then Trump will declare victory in trade deficit cut.

 

[JJD1803]

Bond yields are still going up. Something is fundamentally wrong right now. This is not good. 10 yr yields are still climbing with 2 weeks until June's debt rollover starts at $300 billion a day.

 

[FriedButter]

Bond yields are still going up. Something is fundamentally wrong right now. This is not good. 10 yr yields are still climbing with 2 weeks until June's debt rollover starts at $300 billion a day.

Investors are dumping treasuries to use the money in the markets because Trump global trade war is falling apart.

 

[Captainquirk]

I don’t think that will happen, I refer to the Chinese supplies eating any of the tariffs, with 30% it will be something that the importers can work with.

This deal simply show how unprepared the US was for this trade war, for most things they literally had no alternatives, it wasn’t like, if they had the time they could find other suppliers, for some goods there simply wasn’t another supplier.

This deal basically allowed the US retain some of the GDP that would have otherwise been wiped out, there were plenty of businesses that already went bellies up. Worst yet there are plenty of businesses with long lead times that were feeling major pressure like construction, I learnt more about timber in the last 2 months then I would ever need to know, these are not going to bounce back just like that, it will have a far longer lasting effect.

During Trump 1.0 Chinese suppliers ate some of the tariffs.

Again 30% is something both the sides can work with. Chinese suppliers are not going to eat it all cause of razor thin margins, so Walmart and other U.S. OEMs will have to eat some too.

Whereas anything above 50% to 60% is a nonstarter. Very little difference between 50% or 80% or 200%.

 

[FriedButter]

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Bessent sees tariff agreement as progress in ‘strategic’ decoupling with China​

Treasury Secretary Scott Bessent said Monday that the trade agreement reached over the weekend represents another stage in the U.S. shaking its reliance on Chinese products.

Though the U.S. “decoupling” itself from its need for cheap imports from the China has been discussed for years, the process has been a slow one and unlikely to ever mean a complete break.

However, Bessent said there are now specific elements of decoupling in place that are vital to U.S. interests. The U.S. imported nearly $440 billion in goods from China in 2024, running a $295.4 billion trade deficit.

“We do not want a generalized decoupling from China,” he said during an interview on CNBC’s “Squawk Box.” “But what we do want is a decoupling for strategic necessities, which we were unable to obtain during Covid and we realized that efficient supply chains were not resilient supply chains.”

When the pandemic struck in 2020, demand in the U.S. shifted from one reliant more on services to a greater focus on goods. That meant greater difficulty in obtaining material for multiple products including big-ticket appliances and automobiles. The technology industry, with its reliance on semiconductors, was also hit. What followed was an inflation surge in the U.S. not seen in more than 40 years.

The details of the U.S.-China pact are still sketchy, but U.S. officials have said so-called reciprocal tariffs will be suspended though broad-based 10% duties will remain in effect.

“We are going to create our own steel. [Tariffs] protect our steel industry. They work on critical medicines, on semiconductors,” Bessent said. “We are doing that, and the reciprocal tariffs have nothing to do with the specific industry tariffs.”

The agreement between the two sides is essentially a 90-day pause that will see reciprocal duties halted though the 10% tariff as well as a 20% charge related to fentanyl remain in place.

Bessent expressed encouragement on the fentanyl issue in which Chinese officials “are now serious about assisting the U.S. in stopping the flow of precursor drugs.” Bessent did not indicate a specific date when the next round of talks will be held but indicated it should be in the next several weeks.

U.S. “decoupling” itself from its need for cheap imports from the China has been discussed for years, the process has been a slow one and unlikely to ever mean a complete break.

“But what we do want is a decoupling for strategic necessities

In other words, Ron Vara has been thrown into a road side ditch. From “bringing back manufacturing” to strategic industries only.

 

[Mt1701d]

During Trump 1.0 Chinese suppliers ate some of the tariffs.

Again 30% is something both the sides can work with. Chinese suppliers are not going to eat it all cause of razor thin margins, so Walmart and other U.S. OEMs will have to eat some too.

You are bringing up a completely different scenario, Trump 1.0 was squarely targeted at China, no one else got the splash damage.

At that point in time, they were far more reliant on the US market as a whole, you can argue that is still the case, but that’s only true for some factories and industries, with many others already far more diversified than when Trump 1.0 happened.

The current situation, however, is completely different, due to the 145% tariffs, the factories that were dependent on the US market alone has either been shut down or has been forced to find others to off load their wares.

Returning to the 30% now only proves that US can’t do without the goods from China, otherwise there wouldn’t have been a reverse course at all. So again I don’t think most if any remaining factories will be looking at this situation and thinking of they will need to eat anything from this tariff. Sure maybe some will probably do it for the market share but for the ones already diversified, I simply don’t see that happening.

 

[Captainquirk]

You are bringing up a completely different scenario, Trump 1.0 was squarely targeted at China, no one else got the splash damage.

At that point in time, they were far more reliant on the US market as a whole, you can argue that is still the case, but that’s only true for some factories and industries, with many others already far more diversified than when Trump 1.0 happened.

The current situation, however, is completely different, due to the 145% tariffs, the factories that were dependent on the US market alone has either been shut down or has been forced to find others to off load their wares.

Returning to the 30% now only proves that US can’t do without the goods from China, otherwise there wouldn’t have been a reverse course at all. So again I don’t think most if any remaining factories will be looking at this situation and thinking of they will need to eat anything from this tariff. Sure maybe some will probably do it for the market share but for the ones already diversified, I simply don’t see that happening.

Many Chinese factories have not shut down.

They are on hold, waiting for a reduction in tariffs like the one announced today. Smart businesses will find efficiencies, eat some of the tariffs and continue.

China exported $450 billion to U.S. market by December 2024. So clearly a lot of biz still comes from the U.S. Less reliance compared to before, but still substantial.

 

[FriedButter]

TBH. The 30% tariffs will probably be reduce to Trump’s baseline 10% tariff. In exchange for a fentanyl agreement that will include China removal of the additional 10% tariff on select goods. Both sides will maintain the same 10% blanket tariffs.