Marketplace U.S. and China hit pause on tariff war
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May 12, 2025 Adam Posen, President of the Peterson Institute for International Economics, offers keen insights into the recent temporary pause in the U.S.-China tariff war. He discusses the negative impact of tariffs already felt in various sectors, particularly among soybean farmers. Posen also highlights the innovative approaches that Chinese manufacturers are using on social media platforms like TikTok to access American consumers, illustrating the evolving landscape of international trade relations.
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Partial Tariff Easing Is Insufficient
- The partial easing of tariffs is progress but does not undo previous damage or reduce tariffs to pre-trade war levels.
- The tariff policy remains destructive, causing shortages, inflation, and recessionary effects without addressing the underlying macroeconomic issues.
Prepare for Trade Dependence Reduction
- To reduce dependence on China, prepare ahead by stocking up, finding alternate sources, and building domestic production.
- Without these efforts, reduced tariffs will still hit real incomes and supply chains negatively.
Global Trade Persists Without US-China
- Global trade continues robustly between many countries despite U.S.-China tensions.
- Strengthening trade with allies could be a constructive path forward for balancing economic and security interests.