Lutnick was speaking specifically about Friday night’s news that Trump had decided to exempt Chinese-made smartphones, laptops and wireless headphones from America’s average 134.7 per cent tariff on Chinese exports. At the time, the White House said those products would merely face duties of 20 per cent — brought in previously on all Chinese imports — but for major US companies including Apple, Google and Garmin, the break offered a glimmer of hope that they might be able to navigate the massive supply chain difficulties that the White House was creating for them.
Trump speaks to media on board Air Force One on the way to Florida (Photo: Nathan Howard/ Reuters)“Probably” is not a qualifier that America’s trading partners or its titans of commerce find especially comforting. As they search for certainty, stability, and any sign of predictability about the future of Trump’s trade war with China, the White House is offering them nothing in return.
Commerce Secretary Howard Lutnick has made an uncertain situation even more so after he said a tariff exemption would be temporary (Photo: Jacquelyn Martin/ AP)
Last Wednesday, when Trump announced a partial climb-down from his global trade war, he left 10 per cent across-the-board tariffs in place against the vast majority of America’s trading partners, including the UK. At the time, his loyal lieutenants indicated that China would now become the main target of America’s trade barriers, and in tit-for-tat moves, Beijing raised duties on US exports to 125 per cent, calling Trump’s policies “nothing more than a numbers game with no real economic significance”.
The trade war with China shows no sign of being resolved. Trump has indicated that the Chinese must blink first, insisting that he is awaiting a phone call from President Xi Jinping. CNN reports that for the past two months, US officials have been urging their Chinese interlocutors to make the first move and request a leader-level phone conversation. Xi, who on Friday described China’s economy as being built on “self-reliance and hard work”, appears unwilling to give Trump that particular win.
Trump with Elon Musk and one of his children watch the featherweight fight during UFC 314 in Miami, (Photo by Mandel Ngan/ AFP via Getty Images)It is unclear whether the US leader still favours the all-out protectionism that – in his telling – could eventually see tariff revenues financing the entire American government in place of income tax. Or whether he favours a medium-term return to the principles of free trade, based on bilateral negotiations with America’s trading partners as, one by one, they cut a deal with him to reduce US barriers.
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He professes to want things both ways, while most economists argue that he’s got to choose between being either a free trader, or a protectionist isolationist. While the President ponders his position, the rollercoaster on America’s financial markets is set to continue, threatening further to upend the retirement and college savings accounts held by millions of Americans.
For the President’s fellow Republicans on Capitol Hill and tech bros who bankrolled his election campaign and subsequent inauguration, it may take yet more lobbying to make Trump’s U-turn a genuine reversal in policy. China continues to decscribe Trump’s policies as “a joke”, and beyond matching him tariff for tariff, evinces little interest in making the first move towards a negotiated settlement.
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