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I have good news and bad news for the holiday shoppers in the audience.
The good news is that the US and China announced this morning — in the wake of Chinese President Xi Jinping’s three-day visit to DC — that the two countries are suspending tariffs on $60 billion of goods, including Christmas ornaments, toys and other tchotchkes.
The bad news is that, because retailers ship goods for the winter holidays well in advance, these reductions might come a bit too late to affect this year’s bills. But there’s always 2027, right? Barring another unforeseen trade altercation.
The tariff rollback represents a real and continued de-escalation in the trade war between China and the US, which — at one point last year — was slapping Chinese goods with a whopping 145 percent tariff.
But it’s not a conclusive truce, either. The new agreement doesn’t address the touchiest products for either country, like rare earth minerals (which are used in electronics and clean energy tech) and advanced chips (which are critical to AI development). China also didn’t lower its tariffs on soybeans, which have hit some American farmers so hard they’re thinking of voting for Democrats.
There’s a certain irony to President Donald Trump’s about-face on the Chinese tariffs, incomplete though it may be. For years, the president made confrontation with China central to his political identity and reaped the benefits in votes. Now he appears to be circling back to what was, for decades, the mainstream, default Republican position: Namely, that more and freer trade with China is ultimately good for American consumers and businesses.
President Richard Nixon first set that tone 54 years ago, when he famously became the first US president to visit Beijing. Subsequent GOP leaders leaned further into free trade with China, even as they railed against the evils of communism. Greater trade will bring “great benefits…to all our peoples,” George W. Bush said in a 2001 statement celebrating China’s entry into the World Trade Organization.
But those “great benefits” were a mixed bag for some Americans, history suggests. The price of US consumer goods did fall in the early 2000s as trade between the US and China exploded. At the same time, US manufacturing towns suffered job losses so severe and concentrated that some still haven’t recovered.
Those job losses may have helped propel Trump to the White House, at least in his first term. Researchers have found that communities hit hardest by Chinese competition elected more extreme Congressional candidates in 2010, and then swung hardest to Trump in the 2016 election.
One 2016 paper by a highly regarded team of economists actually calculated that — in an alternate reality where US-China trade grew half as quickly between 2001 and 2016 — Hillary Clinton would have won North Carolina, Pennsylvania, Wisconsin, and Michigan…and thus, the presidency.
In other words, Trump tapped into real harms and anxieties when he veered from the GOP’s usual stance on China 10 years ago. And he might be attempting to address new economic anxieties about inflation and living costs by reversing his course on China again now.
Call it Trump’s Nixon-to-China moment. The question, of course, is whether voters will give Trump credit for (partially) solving a problem that he himself created.
➨ “Microdose” movement. As the weather gradually and inexorably gets colder, many of us will see our daily step counts fall off. You could do as the Swedes do and load up on layers…or you could stay safely indoors and try microdosing movement. Just five minutes every half hour can help reduce the health impacts of extended sitting. Try tying little walks to a specific cue, like the need to refill your water bottle or the end of a meeting.
