Washington – The Trump administration is looking for a discrepancy in the trade war that he started with China this month, qualifying his prices on non-sustainable Chinese products while large retailers warn the White House that US consumers will begin to see supply shortages and higher prices in a few weeks.
The markets initially climbed on the remarks of President Trump and his Treasury Secretary, Scott Bessent, recognizing that the current rate rate of 145% on China will have to decrease “significantly”. But the subsequent comments of the White House on Wednesday, that the administration would not reduce the rate without reciprocal action of Beijing, cooling enthusiasm to Wall Street.
At the fence bell, the industrial average of Dow Jones increased by 419 points, or about 1%, while the NASDAQ composite and the Standard & Poor’s 500 index increased by 2.5%and 1.67%respectively.
“There will be no unilateral reduction in prices against China,” Karoline Leavitt, a press secretary of the White House, said “America Reports” of Fox News in an interview on Wednesday afternoon. “The president has clearly indicated that China must conclude an agreement with the United States of America.”
It is not clear if China will cooperate, however, when it will see the pain first for American households, which could maximize its lever effect in commercial negotiations. Cailian Press, a Chinese media focused on finance, characterized the last rhetoric of the administration as “a sign that Trump already softens the position on his signature pricing policies”.
Trump told journalists on Wednesday that discussions with China were “active” on a “good agreement” and that Beijing has expressed interest in negotiating an agreement.
“I’m not going to say,” Oh, I’m going to play Hardball with China “, said Trump on Tuesday. “We are going to be very nice. They will be very nice. And we will see what’s going on. “
Trump also said that he was not trying to dismiss Jerome H. Powell, president of the federal reserve, despite the threats he could do on social networks on Powell’s remarks warning that Trump’s trade policies would increase prices and slow down economic growth.
The current rate of 145% “is very high, and it will not be so high. Will not be so high,” added Trump. “No, it will not be close to this high. It will drop considerably, but it will not be zero.”
The president’s remarks occurred one day after meeting the heads of the management of three large retailers – Walmart, Target and Home Depot – who warned him that the disturbances of the supply chain were already underway and would lead to empty shelves in American stores in a few weeks, Axios reported.
At another private meeting on Tuesday, in Jpmorgan Chase & Co. between Bessent and investors and reported for the first time by the Wall Street Journal, the secretary of the Treasury recognized that the existing import rights on China were “not durable” and that “de -escalation” was necessary with Beijing. The nature of the private meeting, which was preceded by a market wave, has renewed concerns about the initiate’s offense.
“I want to be clear,” said Bessent in separate public remarks on Tuesday at a forum at the Institute of International Finance. “America does not first mean America alone. On the contrary, it is a call for deeper collaboration and mutual respect among business partners. ”
The secretary’s remarks echoed an earlier motto from the first Trump administration, which pursued more moderate trade policies, and marked a start of your only three weeks ago, when the president announced an increase in massive prices in the countries of the world.
Since then, the president has partially lowered many of these rate rates, but no new trade agreement has been concluded.
“For decades, our country has been pilled to looting, plundered, raped and looted by close nations and far, both friend and enemy,” said Trump, announcing world pricing hikes on April 2. “Our country and its taxpayers have been scammed for over 50 years, but it will not happen. It does not happen.”
Trump had implemented prices on China before its announcement in April, taking 20% from Chinese imports compared to the role of the country in the production of pioneering chemicals that play a major role in the American fentanyl crisis.
He then increased this to 34% on April 2. China has retaliated, which has encouraged Trump to increase tariffs on China to 145%, including the 20% figure applied to fentanyl.
A week of devastating losses to Wall Street after the announcement of April 2, followed by the worrying activity on the bond market, finally led Trump to reduce tariff rates on most American business partners at a universal rate of 10% – welcome to allies such as Vietnam, which had faced a rate of 46%, and the European Union, reaches a rate of 20%. But the rate of 145% on Chinese products has remained.
Bessent, in his remarks in the Institute finance, struck a note of conciliation on his efforts to bring China to the negotiation table.
“China, in particular, needs rebalancing,” said Bessent. “Recent data show that the Chinese economy losing even further from consumption towards manufacturing.
“The current economic model of China is based on exporting its problems,” he added. “It is an unbearable model that not only harms China, but around the world. China must change. The country knows it must change. Everyone knows that he has to change, and we want to help him change, because we also need to rebalance. ”
Peter Tuchman, a merchant on the floor of the New York Stock Exchange, summed up Wall Street’s reaction to Trump’s pivot in a post Wednesday.
“The market likes this new language of (administration) and the desire to start real negotiations,” wrote Tuchman.
“Positive steps,” he said, adding: “Just imagine the reaction when they get an agreement.”
