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China will not give in to Trump’s “bullying”, foreign ministry spokesperson Lin Jian said at a press conference.
“The abuse of tariffs by the United States is tantamount to depriving countries, especially those in the Global South, of their right to development.”
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Calling Trump’s Bluff on ‘Reciprocal’ Tariffs Countries can test his inconsistent trade rhetoric by offering zero tariffs on all bilateral goods and services.
President Trump isn’t consistent about what he wants from his mammoth new tariffs, and that may be an opening for trading partners to test his occasional rhetoric about desiring “reciprocal” trade. Call his bluff and offer zero tariffs on all bilateral goods and services.
Granted this is a long shot. We’ve long thought Mr. Trump’s “reciprocal” line is mainly political spin intended to mollify Republicans and businesses that his tariffs may not be permanent. Wall Street bought this line to its painful regret until last week. The truth is that Mr. Trump loves tariffs for their own sake and he really seems to believe the U.S. will prosper by making or growing everything it consumes only in the 50 states.
That’s the message his chief tariff spinners, Peter Navarro and Commerce Secretary Howard Lutnick, are delivering: Forget about negotiation. Mr. Trump mostly sounds that same message, as he posted Thursday (we’ll spare you the all caps): “To the many investors coming into the United States and investing massive amounts of money, my policies will never change.”
The Vietnam offer is a shrewd one. Mr. Trump hit Hanoi with a 46% arbitrary tariff last week, and To Lam offers zero rates in return. Zero would be the best outcome for both countries, but if a deal ends up with a far lower tariff rate, it will be an improvement.
Similar logic seems to have persuaded Mr. Trump to avoid further tariffs on Canada and Mexico last week, at least for goods that qualify under the USMCA trade deal from his first term. Given the compatibility of its economy with the U.S. and Mr. Trump’s Anglophilia, Britain might also be a trade-deal candidate. Elon Musk broke with Mr. Trump on tariffs this weekend and said he thinks tariffs should be zero between the U.S. and European Union. Good idea.
We aren’t Pollyanish about this. Mr. Trump really may believe that the “little disturbance” he predicted from his tariffs will soon give way to a new era of prosperity. If his rhetoric on reciprocal tariffs is merely spin, then the rest of the world can pursue alternative trading arrangements that leave the U.S. behind. But the zero option is worth a try.
• Investors panic: Stock markets in Asia and Europe plunged Monday and futures pointed to another bad day for US stocks, following US President Donald Trump’s announcement of sweeping tariffs last week. Hong Kong’s benchmark Hang Seng index nosedived, closing 13.2% lower – its worst day since 1997. Stock indexes in Europe were down 4-5% about half-way through the trading day.
• Trump’s trade war: As US and global stock markets tanked, Trump took to social media this morning to argue the US is in a strong economic position and claimed tariffs will boost revenue. With the administration sending mixed signals on whether his trade policies are open for negotiation, fears of a global recession are mounting.
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