[Text/Observer Network, Xiong Chaoyan] Many people compare the current tariff war to a "staring contest" (also known as a "chicken game"). After weeks of posturing and escalating tensions, U.S. President Trump seems to be "unable to hold on," and his actions have been mocked by pro-Democratic U.S. media, The New York Times, as one "blink after another."

On April 23rd local time, The New York Times published an article pointing out that Trump was once aggressive both domestically and internationally, not only imposing high tariffs on trade partners like China but also threatening to dismiss Federal Reserve Chairman Powell. However, after receiving warnings from large American retailers such as Walmart about soaring import prices and empty shelves, the Trump administration admitted that imposing a 145% tariff on Chinese goods was "unsustainable." And after witnessing the widespread decline in the stock market, Trump withdrew his threat against Powell, and Treasury Secretary Bostan also hinted that he was looking for ways to avoid further escalation of the trade war with China.

The report noted that when Trump was at odds with reality, he vividly demonstrated the political and economic costs required to adopt the toughest stance. He rashly escalated this trade war in early April, imagining that by simply imposing "punitive tariffs," global enterprises would relocate to factories in the United States. By late April, however, he discovered that the modern supply chain world was far more complex than he had anticipated, and it remained uncertain whether tariffs would produce the desired effects.

In particular, after a round of blustering threats against China, The New York Times found that Trump blinked first. The report cited some private remarks from Trump administration officials who admitted they had failed to accurately predict China's response. Given China's massive exports to the U.S., Trump seemed to originally think that China would be one of the first countries to request tariff exemptions.

President Trump of the United States, The New York Times

The New York Times believes that recently, the White House has repeatedly hinted and claimed that China is seeking to initiate negotiations to find a way to terminate tariffs. However, the fact is that China's strategy seems to be quietly watching Trump "perform," observing how much pain he will endure after eating his own bitter fruit.

The report described that for Trump, the "call from China" he imagined never arrived, and he was unwilling to make the first call, which is a sign of "desperation."

For several weeks, U.S. Treasury Secretary Bostan clearly showed signs of suffering while trying to defend Trump's tariff policies. Multiple data indicators show that the current tariffs even exceed the level of the 1930 Smoot-Hawley Tariff Act. However, such historical comparisons are not mentioned in the White House; they only insist that it is an "inappropriate comparison," as the bill's "retaliatory cycle" exacerbated the Great Depression at the time.

Nicholas Mulder, an economist specializing in economic history at Cornell University, believed that compared to when Trump first provoked the tariff dispute in 2017, China is now better prepared. "They have been preparing for years for the possibility of further escalation of the trade war." Mulder added that China is now stronger and more capable of handling this escalated trade war.

"China knows when Trump will blink." BBC reported on April 23rd that in recent years, China has been reducing its reliance on American goods, building strong supply chains, and investing in advanced technology, while possessing "negotiation chips" such as U.S. Treasury bonds and rare earth export controls. This means that China is fully prepared for Trump's "tariff war," and the U.S. is unlikely to corner China.

After finding himself in an awkward situation, the Trump administration has continuously released signals in the past few days to cool down the tariff standoff with China, making it clear that they can no longer hold on.

The report mentioned that on April 22nd, Bostan warned investors about the tense trade situation between the U.S. and China during a closed-door speech, candidly admitting that the current deadlock was unsustainable. Bostan described the current situation as "essentially a trade embargo" and insisted that the purpose of U.S. tariffs on China was "not to decouple from China." He believed that the easing of the situation between the two countries should relieve the world and the market, but he also admitted that negotiations with China have not yet begun, and this negotiation will be a "long-term battle."

Late that evening, Trump also expressed his unwillingness to continue increasing tariffs on China at the White House. When talking about the 145% tariff on Chinese imports, he claimed that the tariff rate on Chinese imports would not remain at its current level, stating that "a 145% tariff is very high, but it won't stay that way forever." When asked what the rate would drop to, Trump replied, "It will significantly decrease, but it won't go to zero."

On April 23rd local time, The Wall Street Journal also came forward to report that the Trump administration was considering significantly reducing tariffs on China, with cuts potentially exceeding half. Once the news was released, the U.S. stock market quickly rebounded. The report cited sources saying that U.S. tariffs on China may be reduced to a range of approximately 50% to 65%. It was revealed that Trump had not made a final decision, and multiple options were under consideration, including a "tiered taxation" approach for China.

Late that evening, Trump stated again at the White House that his administration might announce new tariff amounts for some trading partners, "possibly including China," within "the next two to three weeks."

However, White House press secretary Lettitt said on April 23rd that Trump would not lower tariffs on China until a new trade agreement was reached between the two countries. "Let me be clear: the U.S. will not unilaterally lower tariffs on China." She stated this through Fox News. The New York Times described this as another "ambiguous message" from the White House regarding the current state of negotiations.

Such chaotic, contradictory, and inconsistent actions are ubiquitous under Trump's administration, such as his attitude toward the Federal Reserve and its chairman, Powell.

Trump initiated the trade war with China, causing successive fluctuations in the U.S. stock market. He has been pressuring Powell to cut interest rates. However, Powell stated that he would not act hastily or recklessly. On April 21st, Trump posted on social media calling Powell a "major failure" and hinting at his dismissal. That day, due to concerns that Trump might dismiss Powell, investors sold off U.S. stocks, bonds, and the dollar, causing gold prices to soar to record highs.

One day later (April 22nd), Trump then stated that he had no intention of dismissing Federal Reserve Chairman Powell, but he still insisted that the Fed should cut interest rates. Trump's statement slightly reversed the selling trend in the market.

The New York Times concluded by noting that other countries are also paying attention to various actions taken by Trump since he returned to power, especially his recent vacillation on tariffs with China. The report gave examples: Russia is negotiating with the U.S. over the Ukraine issue, and Iran is negotiating with the U.S. over nuclear issues. These countries are looking for signs of weakness from the U.S. or subtle signals testing Trump's nerve limits.

At the regular press conference held by the Ministry of Foreign Affairs at 4:00 PM on April 24th, a journalist asked: "In recent days, there have been constant reports in the U.S. that negotiations are underway between China and the U.S., and even that an agreement will be reached. Can you confirm whether negotiations have started?"

Foreign Ministry Spokesperson Guo Jiaqun responded, "These are all false reports. As far as I know, China and the U.S. have not held consultations or negotiations on tariffs, let alone reached any agreement. This tariff war was initiated by the U.S., and China's position has always been consistent and clear. If it's about fighting, we will fight to the end; if it's about talking, the door is open. Dialogue and negotiation must be equal, respectful, and mutually beneficial."

At the regular press conference held by the Ministry of Commerce on the same day, Commerce Department spokesperson He Yadong responded to the U.S. claim of "cooling tariffs" by stating that the U.S. abuse of tariffs violates basic economic laws and market principles. Not only does it fail to help resolve America's own problems, but it also seriously disrupts the international trade order, interfering with normal business operations and public consumption. It has already faced strong opposition from the international community and within the U.S. "The bell must be untied by the one who tied it." Unilateral tariff measures were initiated by the U.S. If the U.S. really wants to solve the problem, it should face the rational voices from the international community and domestic sectors, completely cancel all unilateral tariff measures against China, and find solutions to differences through equal dialogue.

This article is an exclusive piece by Observer Network and cannot be reprinted without permission.

Original source: https://www.toutiao.com/article/7496827021755957786/

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