Dem
47
GOP
53
The tariffs, especially on China, are going to cause damage in a few weeks, even if Trump and Chinese President Xi Jinping make a deal tomorrow (and Xi says no negotiations are underway). It's too late to avoid all the damage. The die is cast.
The tariffs have severely disrupted trans-Pacific trade. On top of that, China has restricted the export of rare earth elements, which are used in electric motors. The number of cargo ships docking in Long Beach, the main gateway for products from Asia, is way down compared to last month. Some companies saw this coming and stocked up on imports, but when they are all sold or used to make products, there won't be new ones coming in soon. Some products will simply be unavailable, although some retailers may jack the prices way up to artificially limit demand and make out like bandits.
Fewer ships arriving also means less work for dock workers, truckers and retail workers. It also means small businesses that sell products from China may go out of business for lack of inventory to sell. If it takes too long for the tariffs to be reduced, it could lead to a recession. Xi is in no hurry to bail Trump out. He doesn't have to worry about elections next year and probably wants to teach Trump a lesson: Don't mess with China.
The Philadelphia Fed's manufacturing survey shows one of the biggest month-to-month drops on record. Many companies import parts from China, but if the parts aren't there and there is no alternative supplier, then the finished product can't be made. This will cause factories to go idle and workers to be laid off. Business investment is at a standstill since companies have no idea what the economy will be like in 6 months. Companies hate to expand production if a recession is coming up and they won't even be able to sell the products they are making now, let alone more of them.
Even if Trump wants a deal, it may not be so easy to get it. His idea of negotiating is to threaten his opponent and get him to give in. Xi doesn't like one-on-one meetings with trade partners. He likes lower-level subject-matter experts on his side talking to their counterparts on the other side. Once they have agreed on a deal, then they submit it to Xi to evaluate and accept or reject. Trump doesn't work that way. Threatening Xi won't work. Xi holds a lot of cards.
China isn't the only problem. Japan is expected to fiercely resist requests for limits on automobile exports. The E.U. is very unlikely to change its value-added tax or agricultural subsidies. India might be willing to import more food, though, if the price is right.
An additional problem is the general 10% tariff on all countries. Conducting 195 separate negotiations will take time. Who will do the negotiating? Treasury Secretary Scott Bessent is probably capable of it, but even he has only 24 hours in a day.
In short, a certain amount of disruption that people will actually feel is already baked in. Nothing Trump can do now will prevent it. All he can do now is prevent it from getting worse. (V)