On Wednesday, President Donald Trump announced a tentative trade “deal” with China which, if adopted, is a serious loser for American consumers.
In an all-caps Truth Social post, Trump said that China will trade magnets and rare-earth minerals with the United States—which they were already doing before Trump launched the trade war. In exchange, Chinese students will be allowed to study in the U.S.—which was also happening before Trump ratcheted up the trade war with one of our largest trade partners and used students as a pawn in his dangerous game.
What’s more, Trump said that there will be a 55% tariff on Chinese imports into the United States, while China will place a 10% tariff on American imports. That means that American companies will be taking a huge hit to their profit margins with the massive 55% tariffs—and in turn will almost certainly pass those costs down to consumers in the form of price increases.
In other words, this is a real shit sandwich of a “deal.”
“I’m not sure why the [sic] President Trump is boasting that he’s charging Americans a 5.5 times higher tax rate than President Xi is charging the Chinese people,” economist Justin Wolfers wrote in a post on X.
Trump, for his part, painted the agreement as a “done” deal. But Treasury Secretary Scott Bessent—who negotiated with China in the UK over the past few days—wouldn’t give the full details to Congress during a hearing on Wednesday afternoon.
In an exchange with California Democratic Rep. Linda Sanchez, who asked Bessent for more specifics on the agreement, Bessent replied, “We are in the midst of constructing it. It will be a longer process.”
That certainly doesn’t sound like things are fully ironed out yet.
In the meantime, companies are warning that the increased tariffs will cause them to raise prices. And other companies are announcing layoffs due to trade uncertainty, such as the massive consumer goods company Procter & Gamble, which last week announced it was cutting 7,000 jobs.
If this deal does hold, the final product is just another cave by TACO Don, who has become the butt of the joke for quickly folding on his trade threats without getting any benefits for the American people. In the end, his trade mess has only left us worse off than we started for no good reason other than the fact that he doesn’t understand how trade deficits work.
“Wow a trade deal that leaves us worse off than status quo,” Erica York, vice president of federal tax policy at the Tax Foundation, wrote in a post on X of the announced trade deal. “Who could have predicted?”