How Trump managed to get his much-needed China trade victory
Phil Mattingly, CNN
President Donald Trump’s shock-and-awe tariff approach threatened to rupture the global financial system and drive the US economy into recession. Nervous about the prospect of empty store shelves and reignited inflation, Trump sent in his even-keeled and professional negotiators to Geneva to snag a win.
The unexpectedly dramatic de-escalation with China laid the groundwork for a growing series of trade negotiations that may produce a handful of rapid-fire, if less than fulsome, bilateral agreements to reduce US trade deficits.
“We actually have a fresh start with China,” National Economic Council Director Kevin Hassett said in an interview on CNN News Central. “That’s the way to think about these negotiations.”
The decision by both the United States and China to drop stratospheric tariffs by 115 percentage points at the conclusion of two days of talks marked the most significant development in a policy approach that has been equal parts maximalist and messy. The de facto trade embargo between the world’s two largest economies had produced domestic and global economic pressure that appeared on the brink of calamity.
The de-escalation sent markets soaring across the world Monday, as it shed light on a Trump administration’s strategy to maintain significantly higher tariffs while incentivizing its largest trading partners to come to the table with offers.
Sending the serious people
In Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer, Trump sent lead negotiators who are viewed by market participants and their Chinese counterparts as serious, levelheaded and empowered.
As those talks start in earnest, the ongoing effort to secure deals with roughly two-dozen other countries was given a boost last week after a small-scale agreement with the UK. That provided a model for what Trump wanted in the urgent scramble to secure bespoke deals with the US, according to several foreign diplomats involved in the bilateral talks.
The negotiators, parameters for negotiation and clearly serious approach from both sides that will drive the next three months are all viewed as tangibly positive signs by Trump’s advisors. Whether they lead to a substantive outcome remains an open question, but as one advisor put it to CNN, “this a hell of a lot better than the alternative both of us were staring down.”
“This is really the first time it’s been possible to actually see the path to land this plane without some cataclysmic economic disaster,” a Republican senator told CNN. “Doesn’t mean we will, but that’s a lot better than where we’ve been.”
The path from the market-panic-inducing “Liberation Day” tariff announcement on April 2 to this point was hardly linear. Trump’s advisors have long insisted, against plenty of evidence to the contrary, that it was all a deeply strategic roadmap that incorporated every possibility.