‘He's backtracking!’: Donald Trump turns a corner on tariffs and Chinese social media feasts on it
In the trade war with China, Trump is suddenly taking his foot off the accelerator, promising a hefty tariff cut. Is this U-turn a first crack in the armour?
Is Trump backtracking?
Surely that is the tenor on the popular Chinese platform Weibo, where various hashtags such as ‘Trump backs down’ or ‘Trump conceded defeat’ were trending on Wednesday. ‘145% is really very high, and it will not stay that high,’ Trump said in the Oval Office about import tariffs on Chinese goods. In doing so, the US president more or less confirmed what his Treasury Secretary Scott Bessent had said at an investor day at the bank JP Morgan Chase: that the current tariff bid is unsustainable, and ‘de-escalation’ is in the pipeline. According to Trump, high tariffs on Chinese goods will ‘come down significantly, but not to zero’. Between the current level and the level in early 2025 - around 20 per cent on average - there is still a huge gap.
To what extent negotiations between China and the US are already under way remains unclear, but the US intends - dixit Trump - to be ‘very nice’. However, in a reaction, Chinese Foreign Ministry spokesman Guo Jiakun let it be known that the US is still putting ‘extreme pressure’ on Beijing, thus jeopardising a possible agreement. According to Dorien Emmers, lecturer in Chinese studies and economics at KU Leuven, there is a clear distinction between public and political opinion in China. ‘The self-proclaimed world leader declaring China an enemy and then having to retrace his steps, that's the story that social media users now naturally feast on.’ According to her, behind the Chinese government's cool reaction is a lot of suspicion: ‘China is just trying to be very predictable in its policies, which is at odds with this chaos. Policymakers do not want to be influenced by Trump's every whim. After all, what if this friendly attitude turns out to be another temporary whim?’
Where did this U-turn suddenly come from?
The softer tone from the US ‘underlines that US tariff policy has a significant discrepancy between actual results and original goals,’ according to Chinese political scientist Bao Jianyun in the state-run Chinese daily Global Times. Earlier, according to observers, panic in bond markets was the reason why 75 countries got a ‘tariff break’ from the US. But since then, the cascade of alarm bells has not stopped. Earlier this week, the International Monetary Fund (IMF) revised its economic growth forecast for 2025 most downward for the US, from 2.7 per cent to 1.8 per cent. ‘I don't know if reports and facts impress Trump that much,’ says international trade professor Glenn Rayp (UGent). Rather, he sees a shift within his entourage. ‘I suspect there are some people who have spoken heavily to him on trade policy.’
On Monday, Trump received the CEOs of Walmart, Target and Home Depot, the three largest US retail companies. These are said to have warned, according to US media, that the ripples of Trump's policies will be felt in prices as early as two weeks, and that in time even every policymaker's nightmare beckons: empty shop shelves. Calculations by the Budget Lab at Yale University show how badly the tariffs will hit an average household. With an unchanged trade flow, the loss of purchasing power runs to $4,900 by 2025. Even if the share of Chinese imports drops from 14 to 3 per cent due to the tariffs, it is $2,600. A recent CNBC poll shows that 55 per cent of the US population does not approve of Trump's economic policies; never was that proportion higher. Dissatisfaction has also grown sharply among ‘blue collar’ workers - a key constituency of the president - compared to his first term in office.
Can the calm return now?
‘Whether Trump would have said that tariffs will go up or down, the reaction of companies remains the same,’ says Kevin Verbelen, foreign trade expert at Agoria. According to him, ‘all the dust has to settle’ before the doubts disappear, and anyone with investment plans will remain on hold for the time being. A cautious hurrah mood prevailed in stock markets, but much will now depend on how China engages in dialogue, Rayp says. ‘That the US is stepping back on gas after proceeding so triumphantly may cause China to be strengthened in its stance.’ Chinese President Xi Jinping believes China has a higher economic pain threshold. ‘China has become less dependent on the US in response to trade war 1.0,’ Emmers said. The share of US exports fell from 19.2 to 14.7 per cent between 2018 and 2024 - much more sharply than in reverse. ‘But it would still hurt China to tighten the belt so sharply.’
An important role can be played by Europe, Rayp believes, in landing the dialogue. ‘There is a need for a constructive third party. Not just Europe, but a broader cluster of non-aligned countries. That is the only way to avoid this going down the wrong road again.’
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