WASHINGTON—President Trump launched a global trade war meant to usher in a new American manufacturing renaissance. Just weeks after the tariff tussle started, Trump is backing down.
Faced with careening markets and unnerved allies, the president is softening his tough tariff talk as he and his top advisers search for trade deals with allies and adversaries alike.

A surprise truce in an escalating trade fight with China, which was launched by the president with much fanfare just weeks ago, was the latest climb down from an administration that is trying to salvage Trump’s trade agenda without harming the U.S. economy. 

Touting the agreement as a “total reset” in U.S.-China trade relations, Trump struck a conciliatory tone on Monday—a contrast to his campaign rhetoric. “We’re not looking to hurt China,” he said at the White House. Trump praised the deal and privately was pleased with the market reaction on Monday morning, according to people familiar with the matter. 

Tariffs, and in particular righting trade relations with China, were central to Trump’s presidential campaign. Shortly before last year’s election, Trump mentioned China 26 times in a Nov. 4 rally in Pittsburgh. “We’re going to tariff the hell out of them,” he said at the time.  

The volatility in the stock market, risk of stoking inflation and warnings about supply shortages since the president unveiled a new tariff regime in early April have put the administration in a bind, according to people close to the president. 

As China retaliated, some close to the president grew increasingly concerned about the fallout from the trade war. Representatives for major auto companies reached out to White House officials in recent weeks, concerned about increasing prices and Beijing’s export controls on rare-earth metals—which are used in a range of military and civilian technologies, including electric vehicles, people familiar with the matter said. 
Meanwhile, Trump and top cabinet officials have been under pressure to announce deals with major trading partners since the president paused steep tariffs on nearly 100 nations for 90 days—an off-ramp officials replicated in the China agreement.

A White House official said Trump is showing the power of tariffs, disputing that the president has softened his tough trade stances. The official said the 90-day pause came after China showed a good-faith effort to negotiate. 

Trade deals that lower or eliminate tariffs could undercut Trump’s leverage in future talks, as well as his long-term ambitions to reshore U.S. manufacturing by curbing Americans’ reliance on foreign-made goods. Reshaping the economy could require sustaining painful trade barriers for years—or offering other incentives for companies to make their products in the U.S. 

“Once we started down this road and made exemptions for items and products we cared about like electronics, then it was clear we were going to back down and climb down,” said Dan Blumenthal, the director of Asian studies at American Enterprise Institute. “We really didn’t get much out of this.”

Under the terms of Monday’s deal, the U.S. agreed to lower the base level of tariffs on most Chinese goods to 30%, from 145%, for 90 days. In return, China said it would cut its levies on U.S. products to 10% from 125%. While the tariffs have been significantly scaled back from what was essentially a trade embargo on Chinese goods, the new 30% duties are still higher than when Trump took office. 

Still, the deal resulted in lower tariffs on Chinese goods than what Trump and top officials had floated ahead of talks in Switzerland. Trump posted on Truth Social last week that an “80% tariff on China seems right,” while Commerce Secretary Howard Lutnick told Fox News on Friday to expect 34% tariffs with an additional 20% for fentanyl that could be negotiated down. 

Treasury Secretary Scott Bessent, the lead U.S. negotiator, told Bloomberg News after the deal was announced that while negotiations are ongoing, the 34% tariff level—set by Trump on April 2—“would be a ceiling” and it is “implausible” that the tariffs would go below 10%.  

Lowering tariffs on China will also bring down customs duties collected by the U.S. Treasury, which hit a monthly record of $16.3 billion in April. Trump has floated the idea that revenue from tariffs could eventually replace income tax. 

Trump officials have less than two months to make deals before the end of their self-imposed 90-day pause on higher tariffs. The U.K. is the only other country the administration has announced a trade deal with so far. 
The president is visiting Saudi Arabia, Qatar and the United Arab Emirates this week and plans to announce business deals with the U.S., across categories ranging from weapons to artificial intelligence, energy to space. 

Days before the U.S. agreed to a 90-day truce with Beijing, Trump doubled down on his tariffs on China, playing down in interviews and in a cabinet meeting the effect of tariffs on U.S. consumers.
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“All I’m saying is that a young lady, a 10-year-old-girl, 9-year-old girl, 15-year-old-girl, doesn’t need 37 dolls,” he told reporters aboard Air Force One. “She could be very happy with two or three or four or five.” 

In a Fox News segment, GOP strategist Karl Rove compared Trump to Mr. Scrooge, the coldhearted main character in Charles Dickens’s “A Christmas Carol,” for his comments about dolls. The president hit back on Truth Social: “The guy’s a total Loser who’s been wrong about almost everything!”

Republicans on Capitol Hill were also growing uncomfortable with Trump’s messaging, according to people familiar with their thinking. 

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The 90-day truce has been a relief for lawmakers who had been hearing concerns from small businesses in their home districts. “It is volatility, but they know for the next 90 days they can order their Christmas stuff, they can order their toys,” said Sarah Chamberlain, president of the Main Street Partnership, which represents nearly 100 Republicans in Congress. 

Despite the roller coaster of announcements on tariffs, Bessent has tried to calm the markets and trading partners, framing the administration’s agreements as part of a broader strategy. “Throughout the trade process, we have had a plan,” he told reporters in Geneva on Monday morning. 

Michael Pillsbury, a China expert at the conservative Heritage Foundation think tank, said the deal between the two countries should be seen as a win for Trump. 

“This is promising,” said Pillsbury, who advised Trump on China during his first term. “But it could still blow up if there is no dramatic progress in 90 days.”

Source: https://www.wsj.com/economy/trade/trump-trade-policy-deals-9bafbfcf