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Donald Trump: Pressing the pause button
| Photo Credit:
KEVIN MOHATT
The math finally played out. With the stock market apparently losing some $6 trillion in value in the last 10 days or so and the tariff war slowly creeping its way to impacting the bonds market, US President Donald Trump hit the pause button for most countries with the exception of China. Only the flat rate of 10 per cent that went into effect on all countries will remain.
The American President argued that he took the decision as some 75 countries had reached out to negotiate as well as those who did not retaliate to the imposed levies. Beijing was slapped with a whopping 125 per cent tariff after it retaliated and placed its 84 per cent on US imports.
Trump hopeful of deal
In spite of the crushing blows on China, Trump maintained a conciliatory line in predicting of a “very good deal” on the cards. “Xi is a smart guy and we’ll end up making a very good deal” Trump said holding out the possibility of the two leaders speaking in the near future.
It was not just the stock and the bond markets that led to the pause. Reports had it that nearly every close friend and ally of the President, including Elon Musk, had been urging Trump to walk back as a tariff war would have debilitating consequences for the global trading system including plunging the world into a recession. The abrupt decision came close on heels of Beijing’s own measures, the European Union readying with its own measures and Asian allies mulling actions including sending delegations to Washington.
For a President who had all along been telling Americans to take a long-term perspective, Trump told a Republican audience hours before reversing course that world leaders were rushing to look for “tailored” deals.
Unyielding China
But Beijing would not yield. “The tariff escalation against China by the United States simply piles mistakes on top of mistakes”, the Finance Ministry stressed indicating that Beijing was ready to roll up its sleeves and prepare for the long haul.
Even before the latest tariff hike that brought it to 125 per cent — including 21 per cent for ‘lack of respect’ to world markets — Beijing had made it known that it will “never accept such hegemonic and bullying practices”.
But the bottomline for Trump was something he had always been stressing for a long time. “At the some point, hopefully in the near future, China will realise that the days of ripping off the USA, and other countries, is no longer sustainable or acceptable” Trump had written in a social media post.
China’s trade surplus
If the real agenda of the Trump administration is only China, the tit-for-tat tariffs are unlikely to solve the problem. Reports have it that in 2024 Beijing posted a global goods trade surplus of about $1 trillion; and Washington posted a good deficit of about $1.2 trillions. In 2024 trade in goods between the two nations was $585 billion: American imports of $440 billion and its exports $145 billion.
The two largest economies will have to realise that setting right a problem that has accumulated over the years is not going to be easy. Beijing cannot be under the impression that it has weathered many an American administration in the past, Republican and Democratic, and therefore one more is not going to matter.
Washington has to patiently look at the underlying causes of deficits, not mechanically seek redress by tariffs or threatening third countries of shutting the American door if they did business with China.
The writer is a senior journalist who has reported from Washington DC on North America and UN
Published on April 10, 2025
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