Are Trump’s tariffs working? Falling stock prices and gloom and doom MSM posts may suggest otherwise, but there’s a growing body of anecdotal evidence that suggests the tariff announcement already has a host of foreign nations eager to make a deal to eliminate tariffs.
So right now, let’s say: Maybe
First up, a whole lot of countries seem eager to strike trade deals with the Trump Administration. “More than 50 countries have reached out to the White House to negotiate on tariffs, Kevin Hassett, the White House’s national economic council director, said on Fox News on Monday.”
The EU also says it wants to negotiate.
The European Union has offered the United States an agreement on the reciprocal lifting of all tariffs on industrial goods, European Commission President Ursula von der Leyen announced on Monday, days before 20% tariffs on EU exports enter into force.
“Europe is always ready for a good deal, so we keep it on the table,” von der Leyen told reporters in Brussels.
The EU remains ready to negotiate a solution despite US President Donald Trump’s tariff decisions, she said, after an exchange with representatives from the steel and metals industries.
The US imposed tariffs of up to 25% on imports of steel, aluminium and related derivative products from the EU and other trading partners in March.
Note that agricultural products weren’t mentioned. I’m guessing that will be a sticking point for the Trump Administration.
Then there’s Vietnam, which says it’s ready to eliminate all tariffs.
Confirming that Trump’s “dealmaking” was about to shine, on Friday Trump posted on his Truth Social account, announced that he had a “very productive” call with the head of the Vietnamese communist party, adding that if Vietnam wants to cut their tariffs to “ZERO”, all they have to do is “make an agreement with the U.S.”…
Fast forward just one day, and we have an example of the first official capitulation by a trading counterparty as Bloomberg reports that Vietnam has offered to remove all tariffs on US imports after Donald Trump announced a 46% levy on the Southeast Asian nation, according to an April 5 letter from Vietnam’s communist party.
The offer was made by party chief To Lam to the US president in a letter that was seen by Bloomberg. In the letter, Lam requested that the US not apply any additional tariffs or fees on Vietnamese goods and asked to postpone the implementation of the tariff announced by Trump last week by at least 45 days after April 9.
The letter confirms comments made by Trump on Friday on his Truth Social network, following a call between the two leaders. Vietnam, which has increasingly become a key manufacturing and export alternative to China, was slapped with one of the highest tariff rates worldwide last Wednesday.
Expect all the companies profiled as the biggest casualties from the Vietnam tariffs to soar, as the market realizes that for all the posturing, Trump’s tariffs were just that: a negotiating chip to minimize trade barriers against the US, which as Vietnam so aptly demonstrated, are now well on their way out.
Also coming to the table: Taiwan.
In addition to the news about Vietnam bending the knee, The Epoch Times’ Jacob Burg reports that Taiwan’s President Lai Ching-te on April 6 said his nation would offer zero tariffs and no retaliation as the start of negotiations with the United States while vowing to remove trade barriers.
Lai said Taiwanese companies will also increase their investments in the United States. The comments were made in response to sweeping import tariffs announced by President Donald Trump on April 2. Taiwan has a trade surplus with America and will see a 32 percent tariff on its imports into the United States.
The new tariffs do not, however, affect semiconductors, one of Taiwan’s largest exports.
So it looks like the majority of my instant analysis of Trump’s tariff’s effects on the semiconductor industry was wrong.
It’s less than a week since Trump’s announcement, and a whole lot of countries seem extremely eager to make a deal and remove tariffs on American goods. Trump has long been hailed as a master negotiator, and one of his main tactics to to directly threaten one of the most precious things the other side has in order to bring them to the table to make a deal.
As far as retaliatory tariffs from other countries, there’s a lot of muttering, but evidently only China has threatened an immediate 34% tariff, and Trump is threatening another 50% tariff on China on top of the previous ones as a retaliation to the retaliation. Honestly, I don’t think Trump much cares whether China signs up to eliminate tariffs. China was already cheating so many ways on trade, and is obviously America’s greatest strategic rival, that Trump probably wouldn’t mind completely decoupling red China from the American trade system.
A feature, not a bug.
There are enough facets to that last point that it may be worth a separate post…
Tags: China, Donald Trump, Economics, EU, Foreign Policy, Lai Ching-te, Semiconductors, Taiwan, tariffs, To Lam, trade, Ursula von der Leyen, Vietnam
Who will actually be negotiating? Trump or subordinates under Trump’s direction? As quickly as the other countries caved, the US has been screwed for decades.
The Chinese are going to terminate the export of seven heavy rare earth elements to America as their major weapon against the Trump Administration’s tariffs.
The CCP are going to cut us off from dysprosium, terbium, yttrium, gadolinium, samarium, lutetium, scandium, and their various compounds. Dysprosium, terbium, and yttrium are the three really critical heavy rare earths. They are already in short supply.
We need to hire some of the Russian blockade runners. They seem pretty capable at evading sanctions.
“Note that agricultural products weren’t mentioned. I’m guessing that will be a sticking point for the Trump Administration.”
This is an important consideration because agricultural output is what we do much better than anyone else. There would be less resentment of the Japanese advantage in electronics if they would simply accept rice imports. There are cultural reasons for their reluctance but political leadership should be able to charm these fears.
California and Washington state wineries are among the world’s best but Europeans are going dig in their heels on this, especially the haughty French, who tend to overproduce cheap vintage and then distill it into industrial solvent.
Soybeans have application to livestock feed and Asian cuisine alike. Can you imagine the vast fortunes that could be made feeding the teeming hordes of Asia?
And what about canned goods? Much of Europe has nearly identical tastes when it comes to food staples such as canned peas, tomato catchup, baked beans, canned hams & etc. American brands enjoy ready name recognition there, too.
So yeah, agricultural products ought to be high on the list of negotiable items or these trade talks are mere sham.
Cubans still weed sugar cane plantations using hand-held machetes. Instead of subjugating Canada or Iceland, why not broker a deal with Cuba to lease plantations to US industrialists? Cuba is desperately in need of industrial renovation and foreign exchange. The dirt-poor peasant/farmers would be much better rewarded working for Domino sugar that toiling for the state.
This is particularly relevant given the acknowledgement that high-fructose sugar is a factor in obesity and ought to be removed from the food supply. This would make American manufactured foodstuffs more appealing to fussy Europeans as well as weaning the US population off this crap.
So Howzabout it, Donnie? Can you overcome sixty years of animosity and reconcile with Cuba in the interests of expanding US enterprise activity and MAHA?
“This is particularly relevant given the acknowledgement that high-fructose sugar is a factor in obesity and ought to be removed from the food supply.”
Beet sugar is chemically identical to cane sugar and requires only a fifth of the rain water that cane sugar requires. The entire beet growing and extraction process can be automated and produces a vegan product, unlike cane sugar.
“[S]even heavy rare earth elements to America as their major weapon against the Trump Administration’s tariffs.”
Gasp! The Chinese are going to withhold unobtanium from international trade! Whatever shall we do?
Well, considering that coal, nickel and wood pulp have overwhelmingly more economic significance that rare earths, we will just have to soldier on.
In common with economic crackpots of all stripes, Comrade Cartridge believes that value is based on scarcity whereas it is founded on utility. Many more goods have mundane elements in their composition than rare and esoteric ones. You can see this for yourself when you consider the lack of trade in platinum compared to gold or silver.
The object of Dear Comrade’s alarmist missive is not to inform but to confuse. He styles himself as a votary of the Unseen Mysteries, which require his mediation to understand.
Once you are fully confused and no longer trust your own judgment, he will insidiously present his solution to what confounds you.
It is the method of a con man or a religious huckster. Trust not in self-anointed hucksters.
“Beet sugar is chemically identical to cane sugar and requires only a fifth of the rain water that cane sugar requires.”
Given your slavish adherence to all things Russian, it is understandable that you would embrace beets (and fried cabbage and vodka!) but Cuba has long held a comparative advantage in sugar cane production.
Rainfall is no problem in the tropics and the growing season is much longer than that of beet production in Russia, which is why the Soviets bought Cuba’s output.
The US has significant deposits of rare earths in West Texas. There was an effort to start extracting them about three-four years back. It got shredded by a buzz-saw called the Biden Administration. If China refuses to sell theirs, well, I know where we can get some of our own.
A recent US Geological Survey listed…” 200 mineral districts, mines, and mineral occurrences (deposits, prospects, and showings) within the United States that are reported to contain substantial enrichments of the rare earth elements (REEs). These mineral occurrences include mined deposits,..”
These deposits could be profitably extracted if it were not for a host of environmental restrictions surrounding their use. Once again, we see government agents busying themselves with the endless task of restricting economic activity in the furtherance of political control.
Everyone complaining about the Trump tariffs have no plan to stave off US financial collapse other than the status quo. If we are going to collapse, one way or the other, I’d rather we do something out of desperation like tariffs than nothing at all. We can’t even get Congress to get a handle on the out-of-control debt and spending. Look how much push back there is at DOGE for finding all of the fraud, theft, and grift.
Compare and contrast:
War is peace. Freedom is slavery. Ignorance is strength.—George Orwell, 1984
Tariffs are a tax cut for the American people.—White House Press Secretary, Karoline Leavitt
“If we are going to collapse, one way or the other, I’d rather we do something out of desperation like tariffs than nothing at all.”
Fatalism: Well fellas, we’re all gonna die someday so let’s just hurry up and get it over.
Optimism: Assuming the trade deficit is a problem, it can be resolved by reinstating the Gold Exchange Standard abandoned by Richard Nixon in 1971. From that date forward, the US trade deficit has worsened year by year.
Likewise, to end chronic deficit spending in Washington, DC it is only necessary to end the Federal Reserve’s ability to purchase new assets. Yes, it really is that easy. All that’s required is principled leadership from the White House and Congress.
“Given your slavish adherence to all things Russian, it is understandable that you would embrace beets (and fried cabbage and vodka!) but Cuba has long held a comparative advantage in sugar cane production.
Rainfall is no problem in the tropics and the growing season is much longer than that of beet production in Russia, which is why the Soviets bought Cuba’s output.”
A good Fidelista such as yourself should know that Cuba’s entire cane sugar output is about 450,000 tons per annum. It has never exceeded 7 million tons per annum, even when your fellow Communists were running flat out.
What you don’t appear to know is the American consumption of sweetners is about 21 million tons per annum. About 6 million tons of this is HFCS 55 used in carbonated beverages alone.
Bonus Point # 1: The United States already produces eight (8) times the amount of cane sugar that Cuba does.
Bonus Point # 2: Brazil is the colossus of cane sugar production. They produce 1,600 times as much cane sugar as Cuba.
“The US has significant deposits of rare earths in West Texas. There was an effort to start extracting them about three-four years back. It got shredded by a buzz-saw called the Biden Administration. If China refuses to sell theirs, well, I know where we can get some of our own.”
Rare earths are not rare. The light rare earths found commonly in America are much more common than lead. The heavy rare earths are more common than tin.
The ‘rarity’ is separated rare earths. They are so similar electrochemically that it is exceedingly difficult to create individual elemental streams out of bulk mischmetal. It is also an environmental nightmare.
The Chinese dominate rare earth refining. We ship all of our rare earth ores to China to be refined. Rare earths ores are beneficiated, reduced, and then transformed into anhydrous chlorides, fluorides, or oxides – depending upon the particular element of interest. The elements are then liberated by molten electrolysis of these salts. It is a wicked process.
“Well, considering that coal, nickel and wood pulp have overwhelmingly more economic significance that rare earths, we will just have to soldier on.
In common with economic crackpots of all stripes, Comrade Cartridge believes that value is based on scarcity whereas it is founded on utility. Many more goods have mundane elements in their composition than rare and esoteric ones. You can see this for yourself when you consider the lack of trade in platinum compared to gold or silver.”
Your thought leaders in Drooling Joe’s administration endorsed the criticality of rare earth production and refining. DoD spent more than $439 million to reestablish a domestic rare earth element supply chain. DoE spent $ 140 million to create a model scale rare earth refining facility. Like most Biden Administration efforts, the DoD and DoE expenditures came to naught.
No rare earths, no more wonder weapons for your beloved Azov Nazis. REMs are the hitch on the critical path to production of more Stingers and Javelins, which is why Russian Forces are grinding up the AFU.
“A good Fidelista such as yourself should know that Cuba’s entire cane sugar output is about 450,000 tons per annum. It has never exceeded 7 million tons per annum, even when your fellow Communists were running flat out.”
This is why the sugar cane plantations should be leased out to my fellow-running dog communists among the US industrial base.
“No rare earths, no more wonder weapons for your beloved Azov Nazis.”
No worries, comrade. The Banderovite UkroNAZIS have rare earths to fuel their NAZI wunderwaffen and will use them under the tutelage of JooNAZI Zelensky to subjugate the noble, peace-loving Russian invaders.
“Bonus Point # 2: Brazil is the colossus of cane sugar production. They produce 1,600 times as much cane sugar as Cuba.”
Brazilian sugar cane has significant tariff barriers erected against its importation. An added BONUS that comes from Cuban economic development is the allowance of Cuban cigar importation as trade opportunities expand.
So now I have 3 bonus points!
“This is why the sugar cane plantations should be leased out to my fellow-running dog communists among the US industrial base.”
Under the very best scenario, Cuba cannot supply one third of the U.S.’s sweetener requirements.
“No worries, comrade. The Banderovite UkroNAZIS have rare earths to fuel their NAZI wunderwaffen and will use them under the tutelage of JooNAZI Zelensky to subjugate the noble, peace-loving Russian invaders.”
Your beloved Ukrainian Nazis have no rare earth ores. It is a Zelenskiy scam. Take some time to read the 2024 USGS MCS – Rare Earths, available free online. Their absence is why Zelenskiy is skitterish as a cat on a hot plate.
“Brazilian sugar cane has significant tariff barriers erected against its importation. An added BONUS that comes from Cuban economic development is the allowance of Cuban cigar importation as trade opportunities expand.
So now I have 3 bonus points!”
Brazil sugar was not tariffed prior to last week; it was quota’ed. We have had a long convoluted history with Brazil over ethanol, which is the reason they grow so much sugar. Brazil quotas American ethanol and we quota their sugar.
The Brazil sugar quotas are much larger than Cuba’s entire annual capacity.
“Brazil sugar was not tariffed prior to last week; it was quota’ed
It is a distinction without a difference. Quotas, tariff and licensing all produce similar effects: they make it more difficult for US consumers to have their needs met.
Removing these trade impediments would lower the cost to Americans who willingly buy cane sugar and foodstuffs containing it as an ingredient. The money saved could be put to use satisfying additional needs.
In short, Americans would enjoy greater wealth and better health. Why would you deny them this advantage?
“It is a distinction without a difference. Quotas, tariff and licensing all produce similar effects: they make it more difficult for US consumers to have their needs met.”
The difference is the quotas allow a very specific, limited amount of free trade without any financial penalties. The Brazilians did not want significant quantities of their cane sugar to escape, but sporadically need more ethanol for transportation fuels than they can produce, especially in their summer. They did not want to drive up the price of either cane sugar or ethanol, so quotas were their trade control mechanism of choice. They allow some free trade at the margin.
Tariffs would have penalized all trade and produced widespread price increases. All out free trade would have resulted in massive fuel price increases to Brazilian drivers, which was unacceptable to the Brazilian government. Quotas are price neutral in this agreement.