Trump proposes 80% inch on China, leaves the decision improperly

"China should open its market for the USA - would be so good for you !!! closed markets no longer work !!!", posted Trump.

consequences of the high tariffs

These concessions would be a dramatic break with the current reality, which led to the deliveries from China to the United States, according to Ryan Petersen, CEO of Flexport, a logistics and forwarding company, have dropped 60 %. Even if the tariffs fall to 80 %, it is unclear whether this would be enough to convince US companies to import Chinese goods. Economists have found that 50 % represent the decisive threshold for a return to a reasonably normal business between the two countries.

economic impact and inflation

In the meantime, the damage has already been caused. The prices are increasing and analysts from Goldman Sachs found on Thursday that an important indicator of inflation could increase effectively to 4 % by the end of the year due to the end of the year. Even if the tariffs were reduced to 0 % this weekend, there would still be price increases and bottlenecks, at least temporarily, since very little gets into the US ports.

China announced on Friday that exports to the United States dropped by 21 % last month - and this before the effects of the tariffs became felt.

Trump's view and trade relationship

Trump stated that he considers this to be a positive development. In the Oval Office, Trump said that the decline in deliveries from China means that the United States no longer lose any money - a frequent, albeit very inaccurate sentence of the president, who incorrectly equates a retail weight with losses.

Important negotiations are due to

Trump and better both have explained that the high tariffs in China-and China's 125 % tariff on most US goods-are not sustainable and have to be reduced.

However, officials from the Trump administration try to dampen expectations regarding the possible results of the talks in Geneva at the weekend. They represent the talks as a first step, which, however, will not lead to a "deal" or even a framework like that with the United Kingdom that Trump announced on Thursday in the Oval Office with a lot of sensation.

the way back to fair trade relationships

Bessent said on Tuesday in a program on Fox News that these discussions should initiate the process of relaxation in a frozen trade relationship. "My impression is that this will be about de -escalation and not a large trade deal ... but we have to de -escalate before we can get on," said Bessent. "145 % [tariffs], 125 %, is the equivalent of an embargo. We don't want to alienate ourselves, we want fair trade."

The current state of the US economy

In the meantime, the aggressive trade war of the United States has put the US economy into a backward movement. The last report on the gross domestic product, the most comprehensive indicator of the US economy, has been showing the first contraction of America since the beginning of 2022, since an otherwise healthy economy was burdened by the after-school on goods to protect itself from the tariffs. And that was in the first quarter - even before the most aggressive trading policies came into force.

conclusion: a long way to normal

Despite the increasingly serious warnings and economic turbulence, the United States and China are still far apart in terms of a concrete agreement. Even if the talks start this weekend, Bessent said, it could take two to three years for the trade to normalize.

This story was supplemented by additional developments and context.