Undercurrents

Trump deal was NOT a capitulation to China

May 12, 2025
The discussion dives into Donald Trump's recent trade deal with China, questioning its effectiveness and real implications. Market dynamics and the effects of tariffs on small businesses are analyzed, revealing the complexities of the ongoing trade war. The podcast highlights the balance of power in U.S. economic decisions, emphasizing Congress's historic influence. Uncertainty looms large in international negotiations, with insights into the strategic maneuvers that could shape future U.S.-China relations.
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INSIGHT

Temporary Tariff Reduction Deal

  • The US and China agreed to reduce reciprocal tariffs to 10% for 90 days while continuing structural negotiations.
  • This deal pauses the tariff war but leaves many trade tensions unresolved and uncertain in the long term.
INSIGHT

Strategic Decoupling Explained

  • Strategic decoupling means reducing supply chain reliance on China for key sectors.
  • The US seeks self-reliance in steel, semiconductors, and medicines, balancing openness and security.
INSIGHT

Market Pressure Shapes Trade Policy

  • Markets' negative reaction forced Trump to back off extreme tariff hikes.
  • Small business struggles to source from China pressured both sides towards a deal.
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