After raising the tariffs on Chinese goods to 245%, Trump suddenly changed his mind and hinted at reducing the tariffs on China to avoid a complete halt in Sino-US trade. What exactly is Trump's agenda?

Trump and Meloni

Recently, Trump told reporters at the White House that he would not continue to increase tariffs on China, as this would completely paralyze bilateral trade. He candidly admitted that current commodity prices are too high for anyone to buy. In general, the government still hopes that consumers will purchase goods to stimulate economic development.

Moreover, when asked by reporters how he plans to handle tariffs on China next, Trump hinted at the possibility of lowering them. Trump himself had raised tariffs to their peak, but now he seems to be looking for a way out. This "comical performance" has not only sparked heated discussions abroad, but even American netizens don't understand Trump's moves.

Trump's behavior may stem from various reasons. On one hand, the US Consumer Price Index (CPI) rose 6.8% year-over-year in March, with low-income families spending 40% of their income on food. A study by the University of Chicago showed that tariffs caused a 13% increase in costs for intermediate goods in American manufacturing. In other words, despite Trump's reluctance to admit it, tariffs have had a significant impact on American citizens.

Chinese e-commerce platforms dominate

On the other hand, Trump has been negotiating with his allies one after another, but without success. Japan, his first negotiation target, gave him the cold shoulder. Regarding the US demand for Japan to increase its share of costs for maintaining US troops stationed there, Japan clearly refused. With Japan's experience as a precedent, allies seem prepared for negotiation failure.

Even the European Union, which has yet to negotiate with the US, is preparing for all scenarios. According to insiders, the EU is drafting a proposal to restrict exports to the US. If negotiations between the US and the EU fail, the EU will act. Trump intended to build an anti-China united front using tariff measures to isolate China, but this policy clearly does not work.

Trump may realize that America's dependence on Chinese products far exceeds surface data. Without Chinese-made products, not only ordinary people, but Trump himself would be affected. Trump's tariff measures did not weaken Chinese products but instead boosted several Chinese e-commerce platforms, which ranked among the top downloads in the US.

Foreigners coming to China

Moreover, many foreigners, especially American tourists, have recently flocked to China to "buy, buy, buy", purchasing Made-in-China products because "even including airfare, it's cheaper than buying in the US." According to the latest data, American tourists' spending via Alipay has doubled. Many netizens jokingly point out that previously, Chinese people went overseas to shop for others; now history has reversed.

However, tariffs have not dampened American consumers' enthusiasm for Chinese goods. The reason is that American consumers found that even after paying tariffs and shipping fees to buy Chinese-made goods online, the price was still much lower than buying domestically in the US. Trump's tariff strategy ultimately goes against public opinion.

Foreigners shopping in China

Just two weeks into it, Trump already showed signs of backing down. His hints at "lowering tariffs" are actually a reflection of the decline of American unipolar hegemony. The US has to admit that China's industrial manufacturing has taken the lead, and even if Trump relocates manufacturing back to the US, the products won't be competitive.

Nevertheless, although Trump says so verbally, no substantial actions have been taken yet. And given his unpredictable style, China still needs to remain vigilant. Overall, come what may, China will counteract accordingly.

Original article: https://www.toutiao.com/article/7494582042865304083/

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