How do you say “My offer is this: nothing” in Mandarin?
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Trump’s entire “negotiating” style is based on bullying people or entities with far less leverage. When he’s dealing with people he needs at least as much as they need him, he’s got absolutely nothing and any intelligent counterparty knows it [gift link]:
President Trump’s decision to impose, and then walk back, triple-digit tariffs on Chinese products over the past month demonstrated the power and global reach of U.S. trade policy. But it was also another illustration of the limitations of Mr. Trump’s aggressive approach.
The tariffs on Chinese goods, which the United States ratcheted up to a minimum of 145 percent in early April, brought much trade between the countries to a standstill. They caused companies to reroute business globally, importing less from China and more from other countries like Vietnam and Mexico. They forced Chinese factories to shutter, and brought some American importers to the verge of bankruptcy.
The tariffs ultimately proved too painful to American businesses for Mr. Trump to sustain. Within weeks, Trump officials were saying that the tariffs the president had chosen to impose on one of America’s largest trading partners were unsustainable, and that they were angling to reduce them.
Trade talks between the world’s largest economies in Geneva this weekend concluded with an agreement to reduce stiff levies on each other’s products by more than many analysts had anticipated. Chinese imports will face a minimum tax of 30 percent, down from 145 percent. China will lower its import duty on American goods to 10 percent from 125 percent. The two countries also agreed to hold talks to stabilize the relationship.
As as DeLong says, this pattern is going to leave the country considerably worse off, without achieving any of its stated aims:
What masquerades as a trade deal is, in fact, performance art. Trump’s engagement with Starmer yields a non-binding framework filled with future promises but empty of enforceable commitments: an attention-generating stunt dressed in economic garb.
Agreement details are laughably sparse: a minor adjustment in U.S. tariffs for up to 100,000 British cars; vague overtures on steel and aluminum; and symbolic wins on beef and ethanol.
But the broader implications are serious, for this is likely to have very damgaing structural consequences. Declining exports, rising input costs, and a loss of investor confidence follow. The U.S. isolates itself from global trade networks, with all the inflationary and productivity-sapping consequences that entails. And beware of the tails of the distribution: not just bad, but catastrophic. Right now everyone is hunkering down, expecting that Trump will soon lose interest and wander off from trade.
But the institutional wreckage he leaves will endure. Yes, by January 2026 Trump is almost certain to have lost interest in trade and tariffs, and to have have wandered off into the business of wrecking other parts of the fragile equilibria that sustain American prosperity, But his actions in 2025 will have changed the world.
Patrick Radden Keefe’s profile of Mark Burnett might me the most important single text for understanding the Trump presidency. The illusion of being a great businessman matters a lot more than the reality, until Trump is in a position to do what he wants with little institutional restraint.