US trade war retreat: The art of the deal or utter incompetence?
trade-wars
A 104% tariff on China wiped $6.2 trillion off the S&P 500 in a day — then Trump partially retreated, leaving the US with its highest average tariff rate in 60 years.
The whiplash of two days in April 2025: on Day 79 the administration’s “reciprocal tariffs” — including a 104% levy on Chinese imports — triggered a $6.2 trillion rout in the S&P 500; on Day 80, facing a bond-market sell-off, Chinese resistance, and EU retaliation, Trump delayed the new tariffs for 90 days. Supporters call it savvy negotiating; the argument here is that the reversal undermines the stated reshoring goal while adding damaging uncertainty. A baseline 10% tariff on all countries stays in force regardless, leaving the US with a trade-weighted average tariff of roughly 28% — the highest in six decades.
Originally published on Substack, April 10, 2025.