U.S. and China agree to slash reciprocal tariffs in major step toward easing trade war

[Taylor]

No, you are not....

Of course you are. That's what a trade imbalance is.

if your economy is making money, you will spend it internally and externally. I hate using simple analogies as they can miss the mark..... but, I make money in my home based business. I go to Safeway to buy groceries. I have a trade imbalance with Safeway since they not paying me..... my spending money at Safeway says NOTHING about my personal finances.... I am not spending more than I make, I am merely spending more at Safeway than they are paying me.

Then overall, you have a large trade surplus, so the analogy does not comport with where we are as a nation.

 

[stealthycat]

We’re talking about China here. Hellooooo.
We’ve been f****d around by China long enough. Just like the border, he’s doing something about it.

exactly right

the left hate the success for the USA that Trump brings ... 7 pages here shows it

 

[Chomsky]

That's what we should be doing. When we decided to push the dollar as the default currency for international trade, we were sold the idea that we would move away from manufacturing and instead upskill our labor into more technologically forward endeavors and production. Go to college, get a good job, etc. That's what we should do, we should lean hard into science, engineering, and other more advanced technology, development, and innovation. It's not time to go backwards, it's time to actually fulfill that bill of goods we were previously sold.

Absolutely.

We must remember the post-war American manufacturing that MAGA reminisces about, was the high-tech of its time. Back, when we embraced STEM.

We need to be doing technology in this country, including IP. We can & should manufacture, but high-tech high-profit advanced manufacturing.

We should be furthering manufacturing technology, not regressing it. "Millions of hands screwing-in millions of little screws"? 'No', that's not what we want.

 

[Taylor]

Creating economic dependencies that are impossible to detangle is part of China’s geopolitical strategy. And they’re winning.

China corners the battery energy storage market - CRU Group

Chinese companies have successfully commodified lithium iron phosphate (LFP) batteries for energy storage systems. They are cornering the market with vast scale and super-low costs in the same way they did for the solar PV sector.

www.crugroup.com

https://www.nytimes.com/2006/01/22/business/worldbusiness/china-corners-market-in-a-hightech-necessity.html

China Aims to Corner the Undersea Mineral Market, Too

The race is on to tap the riches of minerals in the high seas.

foreignpolicy.com

 

[Airyaman]

Increasing economic output and lowering prices thereby creating an improved standard of living.

Lol.

That happened last time, right?

 

[Callen]

Actually, China blinked on April 24th when they started exempting US goods from tariffs after realizing they had no other source.

You mean after the US blinked in doing the exact same thing?

 

[Chomsky]

Chinese consumers will have the opportunity to buy more also.,

Except everyone's paying more, especially Americans.

 

[Chomsky]

If we’re being honest about the problem statement, the problem is that the American manufacturing industry was murdered by unions and labor laws. That’s why we’re dependent on China, Southeast Asia, and India - because Americans demand that somebody be exploited so the widgets they want to buy are dirt cheap. That’s really why they’re howling now about tariffs and why we’re in this predicament in the first place.

You talk about “trashing the quality of life”but that quality of life is built on foreign slave labor. Whether it’s by tariffs or “fair” and humane working conditions -

This is true.

Americans need to get used to the idea of paying what that costs if we’re ever going to get our economic independence and resiliency back.

But Americans will never work at the wages or under the conditions of overseas labour. Nor will we pollute our land and air to that level, nor subject our workforce to those manufacturing hazards.

Trying to move various & sundry manufacturing to America is a fool's errand.

Better to focus on science, technology, and IP, while selectively manufacturing in national interest and growing technologies.

 

[Chomsky]

There is nothing wrong with a trade deficit. We are a country that has ran trade deficits on goods for decades, yet we have an economy that is the envy of the world. Moreover, on services, where there is a much, much higher margin than in goods, we have a trade surplus.

Take the following example. An outdoor goods company outsources the production of its tents, hiking poles, and outwear to China. It has exact standards on how it's goods are produced, and it has made various manufacturers in China compete on the production of those goods. As a result, those manufacturers have an average of 5% markup on those goods. That outdoor goods company imports them and puts anywhere from 30% to 300% markup on them. Thus the outdoor goods company captures much more economic benefit from those goods than the Chinese companies that made them. Moreover, to keep the Chinese manufacturing companies competitive, the Chinese government has to pursue economic policies that artificially lower wages there. In contrast, Americans have seen their wages increase for decades to the point where the average American earns more than the average Western European, the average Canadian, the average Japanese citizen, and the average Aussie.

While there is an argument for near-shoring critical technology, there is no economic issues at all with running a general trade deficit.

Would you rather be a software engineer at Apple, or someone sorting plastic soldiers into bags that will be sold for 2 dollars each in the west?

Bingo! We should play to our strengths, that being IP, services, and specific hi-tech manufacturing.

We need STEM, not strong backs!

 

[Chomsky]

He's not doing anything but costing me money

To say nothing about economic (& other) anxiety!

 

[Felis Leo]

If you have a trade imbalance you are, by definition, spending more than you make.

That is not what a trade deficit is. By definition. It simply means we are are purchasing more goods from another country than they are from our country.

Yes, one of the benefits of a trade deficit is access to affordable goods. This is at the cost of debt accumulation and potential economic vulnerability. We saw that during Covid, which is why there is a global pullback from free trade.

Our debt accumulation is not the result of trade deficits. This is incoherent economic illiteracy.

 

[Airyaman]

 

[ajn678]

If you honestly believe well paid manufacturing jobs that support a middle class are the end destination here.

You are being flat out DELUSIONAL.

Delusional is too nice a word.

 

[maxparrish]

90 day pause. leaves tariffs on Chinese exports at 30% / US exports are 10%.. read the entire link for details

U.S. and China agree to slash reciprocal tariffs in major step toward easing trade war

The world’s two biggest economies agreed to a 90-day pause on most of their levies after a first round of trade talks in Switzerland over the weekend.

www.nbcnews.com

HONG KONG — The United States and China said Monday that they had agreed to a 90-day pause on most of the tariffs they have imposed on each other since last month, sending stocks soaring amid hopes of an easing trade war between the world's two largest economies.

Bessent rejected the suggestion that it might have been better to start with negotiations rather than announcing a series of tariffs that caused global financial turmoil, saying the U.S. had already tried to rebalance trade by working within the system and that “business as usual” would not have worked.

In an interview Monday morning on CNBC, Bessent said that the two countries now have "a mechanism to avoid the upward tariff pressure."

Bessent is, per leaks, just covering Trump's ass for this boondoggle. He was intentionally cut out of the tariff loop, run by Navarro and Lutnick, because unlike these fools Bessent believes in negotiation over confrontation, and it was an unacceptable view when Trump and his yes men were on the bandwagon of tariffs being a done deal, not negotiable UNTIL the bond market scare elevated Bessent's voice and cordoned off the tariff crazy's.

Having created the crisis, the "announcement" is a partial retreat - prior rates were essentially mutual embargoes, which brought neither revenue nor products. None the less this "progress" towards sanity is merely slowing and softening what will still impose a massive tax on American business and consumers.

Ironically it is communist China that grasps market economics and rejects dogmatic arcane beliefs, far more than Trump and his couple of Tariff clowns. The Chinese climb down to 10 percent was a no brainer - it is high enough to suggest to the Chinese public that Chinese leadership is strong but inconsequential enough to allow Chinese import businesses and consumers to survive.

On the US side it is still a huge blow to American businesses and consumers, who purchase Chinese goods as the tariffs will now be 30 percent on top of existing tariffs.

Prior to Trump's first tariff war with China the average tariff on US goods in China was around 8 percent, and it was 3.4 percent in Ameria on Chinese goods.

Then till 2025 the average tariff on US Goods in China was initially 20 percent, later reduced to 15 percent, while US tariffs on China has been 21 percent. The "agreement" raises the average tariff rate on US goods to 25 percent (15 plus 10) and on Chinese goods to 51 percent (21 plus 30 percent).

So Trump's "victory" is that he gets to soak Americans in taxes for the goods that will now be bought, while the Chinese consumers prosper with much lower rates.

The more Trump "wins" the more Americans lose.

 

[Chomsky]

It may very well be that American manufacturing is beyond saving but we need to try. As a reminder, China has much grander, more sophisticated, and far more subtle geopolitical designs than the United States. Defining quality of life by the American obsession with instant gratification and cheap goods is going to be the end of us sooner or later.

Why? Besides in matters of national security?

If China will do our dirty-work cheaply, why not let them?

 

[Taylor]

But Americans will never work at the wages or under the conditions of overseas labour. Nor will we pollute our land and air to that level, nor subject our workforce to those manufacturing hazards.

Trying to move various & sundry manufacturing to America is a fool's errand.

Better to focus on science, technology, and IP, while selectively manufacturing in national interest and growing technologies.

If manufacturing comes back to the US, it will not be through slave labor, but automation. Fewer workers performing the same work with greater efficiency. All the more reason to keep up our AI edge and maintain export controls. Don't know what to think of this until we find out what will replace it. Hopefully, there's a plan...

Trump to change controversial Biden-era restrictions on AI chip exports​

https://www.cnn.com/2025/05/08/tech/trump-cancels-biden-ai-chip-curbs

 

[Chomsky]

Whether and to what degree a tariff is paid by consumers (or even importers) is highly dependent on the price elasticity of the product. If exporters could simply get away with a 30% increase on the price of goods, don't you think they would have done so prior to any tariff?

I'm not sure what you're arguing here, but all the taxes are borne domestically, with the consumer ultimately paying the bill.

"Elasticity" only goes so far, and so long.

 

[gman]

We’re not just talking about toys, clothes, small appliances here. There’s copyright infringement, patent protection, intellectual property rights, and on and on that the Chinese have refused to honor thereby stealing from the pockets of the owners. The Chinese don’t honor these because under communist ideology there’s no such thing as individual property rights.

 

[Michael Cole]

We’re talking about China here. Hellooooo.
We’ve been f****d around by China long enough.

No, we're talking about free trade among private entities, not China. Companies trade with each other, not countries. Trump has some people confused.

Just like the border, he’s doing something about it.

By doing nothing. For 90 days. Again.

 

[Taylor]

I'm not sure what you're arguing here, but all the taxes are borne domestically, with the consumer ultimately paying the bill.

"Elasticity" only goes so far, and so long.

People will only buy the product at +30% if they think it's worth +30%. For a lot of stuff, they won't. They'll buy something similar from another seller, or spend their money on something they think provides more value. That forces the exporter to reduce the price, or the importer to take a hit on the profit margin. In either case, the result is a product that may cost consumers more, but not +30%. People are pretty value-conscious.

 

[Lycanthrope]

Glad to see our foolish president back away from the cliff.

And then running towards it...and then backing off...and then running towards it...

Makes you wonder ho much the monied elite are benefitting from Donald's perpetual chaos.

 

[Chomsky]

If manufacturing comes back to the US, it will not be through slave labor, but automation. Fewer workers performing the same work with greater efficiency. All the more reason to keep up our AI edge and maintain export controls. Don't know what to think of this until we find out what will replace it. Hopefully, there's a plan...

Trump to change controversial Biden-era restrictions on AI chip exports​

https://www.cnn.com/2025/05/08/tech/trump-cancels-biden-ai-chip-curbs

I'm fine with this. As long as it does not compromise national security.

If we're going to do manufacturing, this is the type of stuff we should be doing.

And instead of decrying higher education as "Liberal Indoctrination Camps", perhaps MAGA should consider their off-spring might be well served, and in-turn serve the country well, by considering STEM education.

 

[Chomsky]

View attachment 67569488

China will increase its defense budget 7.2% this year

China says it will increase its defense budget 7.2% this year as it continues its campaign to build a larger, more modern military to assert its territorial claims and challenge the U.S. defense lead in Asia.

apnews.com

The budget, which adds up to about $245 billion, was announced at the National People’s Congress, the annual meeting of China’s legislature. The Pentagon and many experts say China’s total spending on defense may be 40% higher or more because of items included under other budgets.

Our "14%" is hugely significant.

Significant, but not game-changing.

And only a small percentage of GDP ends-up in China's government coffers.

If we wanted to make this argument, we could apply it towards virtually anything. In reality, it doesn't work that way.

 

[ALiberalModerate]

If we’re being honest about the problem statement, the problem is that the American manufacturing industry was murdered by unions and labor laws. That’s why we’re dependent on China, Southeast Asia, and India - because Americans demand that somebody be exploited so the widgets they want to buy are dirt cheap. That’s really why they’re howling now about tariffs and why we’re in this predicament in the first place.

You talk about “trashing the quality of life”but that quality of life is built on foreign slave labor. Whether it’s by tariffs or “fair” and humane working conditions - Americans need to get used to the idea of paying what that costs if we’re ever going to get our economic independence and resiliency back.

The Chinese are not working as slaves. More people in China have been lifted out of poverty over the last 40 years than anywhere else in the history of civilization.

I have spent a lot of time in China. The people working in those factories don’t live as well as we do but them live better than you think they do.

 

[iguanaman]

Takes 2 to tango. 90 day pause gives room for negotiations toward a trade agreement

Most real trade agreements take years to make. Besides Trump does not comply with his own trade agreements like the USMCA so what is the point? The point is that now Chinese goods will cost 30% more than under Biden for 90 days and after that who knows?