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Trump retreated on tariffs yet again, trying to sell it as a win.
GENEVA (AP) — U.S. and Chinese officials said Monday they had reached a deal to roll back most of their recent tariffs and call a 90-day truce in their trade war to allow for more talks on resolving their trade disputes.
Stock markets rose sharply as the globe’s two major economic powers took a step back from a clash that has unsettled the global economy. Economists warned that tariffs still remained higher than before and that the outcome of future talks was uncertain.
U.S. Trade Representative Jamieson Greer said the U.S. agreed to drop its 145% tariff rate on Chinese goods by 115 percentage points to 30%, while China agreed to lower its rate on U.S. goods by the same amount to 10%.
It’s still a high tariff and it’s 90 days and then what? In Krugman’s words, this is an arsonist posing as a firefighter. Note, too, that tariffs on goods once subject to de-minimis exceptions, including direct shipments from fast fashion retailers like Shein, are still in place.
The uncertainty is taking its toll.
Americans are reconsidering major life events including marriage, having children and buying a home amid economic anxiety in the opening months of the Trump presidency, according to an exclusive poll for the Guardian.
Six in 10 Americans said the economy has affected at least one of their major life goals, according to the Harris poll, citing either lack of affordability or anxiety around the current economy.
I view these polls with some skepticism since there’s a question whether it’s just measuring media consumption by proxy (“Government Policies” could mean something specific to a Fox viewer). But if you add in Stock Market and Tariff Policies on the graph above, almost 40% of respondents consider themselves affected by Trump’s inconsistent, impulsive tariffs. The vibes are not good.
For news on shipping and logistics, I watch What’s Going on With Shipping, a YouTube channel hosted by Sal Mercogliano, a professor at Campbell University and expert in shipping logistics. He made the point in one of his recent videos that the goods pipeline, the time it takes something manufactured in China to get to store shelves or an Amazon warehouse, is 4-6 months long. What’s been happening is that exporters began increasing exports to the US around the time Biden quit, and it’s now tailing off. So maybe there’s 4-6 months of “stretch” in the pipeline (i.e., goods piled up in warehouses), and maybe not, but a 90 day reduction in tariffs by an unstable, unpredictable and irrational party is probably not enough to start up that pipeline again.
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