Cnn
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President Donald Trump, the chief merchant, said for weeks that at least one trade agreement was imminent with one of the dozens of countries in active negotiations with the United States to avoid punishing prices. So where is it?
On Sunday, aboard the Air Force One, Trump said that “could very well be” of the trade agreements announced this week. He also said it last week. And the previous week.
At the same time, Trump has continued to temper expectations, saying that foreign countries – friends and enemies – have “torn” the United States for years, and trade agreements will only come when he accepts terms that will benefit the Americans. The ball is in its yard, not theirs, supports Trump.
“We negotiate with many countries, but at the end of this, I will put my own offers because I have concluded the agreement, they do not define the agreement, I concluded the agreement,” he told journalists on Sunday. “It is not like a big deal that will be signed – in some cases, we will sign them, but we do not have to sign them. I will define the agreement, I will define the price.”
The promise of a potential agreement – the administration has declared that India, Japan and South Korea are the countries most likely to reach an American trade agreement first – has first restored confidence in the American financial markets and has stimulated certain hopes that the world could avoid the spinoffs of the worse business war scenario.
But over the weeks without agreement in view, the Trump administration may inflict serious economic damage which could quickly turn into a American and global recession. America's aggressive trade war has already sent the opposite of the American economy. Last week's quarterly report on gross domestic product, the widest measure in the US economy, has shown the first American contraction since the beginning of 2022, because an otherwise healthy economy was driven by companies storing goods to be ahead of prices.
And it was the first quarter – before the most aggressive trade policy took effect.
The slow rhythm like molasses to hit any type of compromise on the trade does not increase well for the ultimate price: relaxation with China. With prices of at least 145% on Chinese imports and a reprisal rate of 125% by China on American products, trade has almost stopped with one of the most important economic partners in America.
This means that America is only a few days away from the disturbances of the pandemic supply chain which could cause higher prices and empty store shelves.
Trump said that in an interview last time, he had already concluded 200 commercial transactions, later clarifying that they will be done soon. Administration officials said they were in advanced commercial negotiations with more than a dozen countries.
Despite the rhetoric of the administration that she is in advanced commercial negotiations with more than a dozen countries, real commercial transactions take a long time – often years – to chop. They generally involve incredibly complex chords, plunging into the minute of various goods and non -tariff barriers. They often involve important political considerations because various parties seek to protect voters with particular interests.
Instead, any “agreement” the inks of the Trump administration – whenever it happens – almost certainly resembles a memorandum of understanding. This can lead to a decrease in prices on goods from a particular country in the short term, but they will probably not do much that is equivalent to a substantial economic victory for a while.
Indeed, Trump established a close deadline to do everything: the “reciprocal” prices which entered into force on April 7 and were interrupted for 90 days on April 9, affect dozens of countries. Thus, the clock is exhausted on July 8 – during the punishing of prices of up to 50% on dozens of nations should return into force.
“The 90-day tariff break, which is now about 25% more, gives a short time to typical commercial discussions that require months, even years, to create a trade agreement,” said Jacob Jensen, trade policy analyst at the American Action Forum, a central-right political institute. “There is a significant difference if these transactions are official and written trade agreements rather than verbal commitments to buy more American products, because one has long -term economic implications and the other can be ignored in addition.”
Trump said that he would not extend the prices a second time – and, in fact, could act earlier to restore certain prices on the countries with which his administration cannot reach an agreement, perhaps in a few weeks.
“It will be difficult for the US trade representative to potentially negotiate 100 separate trade agreements within 90 days, which means that President Trump must soon determine whether the prices will be reintegrated or delayed,” said Jensen.
And even if the transactions are finally concluded with all the countries, there is no guarantee that Trump would keep them. For example, Trump, during his first mandate, played a decisive role in the negotiation of the USMCA free trade agreement with Canada and Mexico, to abandon it to its second mandate, by invoicing a 25% rate outside of certain Mexican and Canadian goods. And by placing significant prices on practically all the goods entering the United States, Trump has also exploded a certain number of existing trade agreements with allies.
Whatever the number of business partners with whom the United States reaches the agreements, the one that really counts is China. And it seems to go anywhere quickly.
The historically high price on China has actually stopped all the trade between the two countries, Trump said on several occasions. The number of china-directed cargoes from the United States fell 60% in April, according to Flexport, a logistics and freight transfer broker. JPMorgan estimates that Chinese imports in the United States will dive up to 80% by the second half of the year.
American consumers are expected to expect pandemic type disturbances, the goods that have been stored before prices take effect to run out of next week, including higher prices, shortages and empty store shelves.
The Treasury Secretary, Scott Bessent, said on several occasions that the high price on China was “unsustainable”, and Trump also said that he expected the price. But it would be necessary to drop considerably – more than half – so that any real exchange to recommend, according to commercial experts. But even then, the economic damage would be caused – and it would take weeks, even months, the American shelves will not be reconstructed.
Despite increasingly disastrous warnings and economic disorders, the two countries do not seem to be at a distance close to an agreement. China has repeatedly denied Trump's statements that they are in talks, and both parties have dug, saying that they will need major concessions at the start to start negotiations. Bessent said he could take two to three years for trade to normalize with China.
However, some signs indicate that the cracks for the wall between the countries. China said that last week, it “currently assesses” the United States’s proposals to start commercial talks, in a subtle change that could open the door to negotiations. And Trump reiterated last week that prices on Chinese imports to the United States will ultimately be reduced.
“At one point, I'm going to lower them because otherwise you could never do business with them,” he said in an interview with “Meet The Press with Kristen Welker of NBC”, who registered on Friday. “They want to do business a lot … their economy collapses.”
