What did Donald Trump do today?
He shot himself in the foot in "negotiations" with China.Over the last two days, businesses on American stock exchanges have lost nearly $5 trillion dollars as markets price in the damage to the economy that Trump's enormous import taxes will have. Trump, who is spending the weekend playing host to a Saudi Arabian-owned golf tournament at one of his clubs, has mostly ignored the issue or claimed it doesn't really matter. When he has commented, it's been in the form of social media posts like this, in which he blames Americans or their businesses for needing the money his tariffs are sending up in smoke:
The only affirmative argument in favor of this massive tax on consumers that Trump has advanced is that other nations will be so anxious to avoid seeing their sales to American customers crater that they will make concessions. For example, he said yesterday that tariffs were key to the deal he expected to make with China over the sale of TikTok:
You have a situation with TikTok where China will probably say: "We'll approve a deal, but will you do something on the tariffs?" We could use tariffs in order to get something in return.
TikTok's operation since Trump took office has technically been illegal under a 2024 law requiring it to divested from the Chinese government's ownership stake, but Trump said he would not enforce it while negotiations were underway. Today, he was forced to extend that waiver for another 75 days.
Also today, China imposed reciprocal tariffs of 34% on the United States. These are much higher than the reciprocal tariffs of Trump's first-term trade war, which devastated American farmers and cost tens of billions of dollars in taxpayer bailouts.
Why does this matter?
- When your "dealmaking" gets you less than you otherwise would have gotten, you are making bad deals.
- American companies failing is a bad thing and the president should know that.
- American consumers are not nearly as stupid as Trump thinks they are.