Everybody is so happy right now. The Dow Jones Industrial Average was up more than 1,000 points today, the talking heads on television are bubbling over with optimism, and even many of President Trump’s harshest critics are cheering. It warms my heart to see everyone so happy, and so there is part of me that is not inclined to dump rain on everyone’s parade. But I am not going to tell people what they want to hear just to tickle their ears. I have got to tell the truth about the agreement that has just been made with China, and the truth is not all rainbows and lollipops.
First of all, we don’t actually have a “trade deal” with China. What we have is a 90 day “cooling off period” during which we could potentially negotiate a “trade deal” with China.
There is an enormous difference between those two things.
For 90 days, both sides will reduce tariffs dramatically.
Without a doubt, that is a good thing.
If we had continued to impose a 145 percent tariff rate on most Chinese products, there would have been empty shelves and shortages all over America.
Thanks to this “cooling off period”, we have been able to avoid such a scenario at least for now.
During the “cooling off period”, there will still be tariffs.
Most U.S. exports to China will be hit with a 10 percent tariff rate.
That is definitely a win.
Major news outlets are reporting that most Chinese exports to the United States will be hit with a 30 percent tariff rate during the “cooling off period”, but that is not accurate.
On the War Room, Jason Miller explained what is actually happening. According to Miller, “we have 50 percent tariffs on China, they have 10 percent on us”.
He got to that figure by adding the 10 percent baseline tariff rate plus the 20 percent fentanyl tariff rate plus the 20 percent tariff rate from Trump’s first term.
And this is actually confirmed on the official White House website. It states that the only tariffs that are being removed by the United States are the “additional tariffs” that were imposed on April 8th and April 9th…
The United States will remove the additional tariffs it imposed on China on April 8 and April 9, 2025, but will retain all duties imposed on China prior to April 2, 2025, including Section 301 tariffs, Section 232 tariffs, tariffs imposed in response to the fentanyl national emergency invoked pursuant to the International Emergency Economic Powers Act, and Most Favored Nation tariffs.
So that leaves us with a 50 percent tariff rate on Chinese imports during the “cooling off period”, and that is about where U.S. officials were projecting that we would end up.
According to U.S. Treasury Secretary Scott Bessent, the current tariff rate on Chinese imports is a “floor”.
In other words, even if a permanent trade deal with China is reached, we shouldn’t expect the tariff rate on Chinese imports to go any lower.
Bessent is also telling us that the U.S. is purposely making a strategic decision to become less dependent on Chinese products…
Treasury Secretary Scott Bessent said Monday that the trade agreement reached over the weekend represents another stage in the U.S. shaking its reliance on Chinese products.
Though the U.S. “decoupling” itself from its need for cheap imports from China has been discussed for years, the process has been a slow one and unlikely to ever mean a complete break.
However, Bessent said there are now specific elements of decoupling in place that are vital to U.S. interests.
So things are never going to go back to the way they once were.
The Trump administration is framing this “cooling off period” with China as a big win, and stock prices absolutely soared today.
Interestingly, the Chinese are also framing this “cooling off period” as a big win for them too…
Chinese officials, influencers and state-run media on Monday were casting the initial trade agreement and 90-day tariff pause with the United States as a victory and a vindication of Beijing’s negotiating strategy.
They’re arguing that their defiant public posture worked — and was a major reason they were able to strike a deal with U.S. officials in Switzerland with relatively few concessions.
“China’s firm countermeasures and resolute stance have been highly effective,” said a social media account linked to China’s national broadcaster CCTV.
Tariff rates have been temporarily slashed by both sides for a period of 90 days.
Does that put us in a better position than last week?
It most certainly does.
But the tariff rate on Chinese imports is now far higher than it was just a couple of months ago.
That is not good news at all.
Prices on thousands upon thousands of products that we import from China will be going up.
In some cases, the price increases will be quite dramatic.
Those that are on the bottom levels of the economic spectrum will be hit the hardest.
If you shop at Walmart, Target, Home Depot or at any of our dollar stores, you will feel the pain.
Our standard of living has been going down for years, and it is about to go down even more.
According to CBS News, even after accounting for lower tariffs on Chinese goods “Americans today face an overall effective tariff rate of 17.8%”…
Even with the contours of a U.S-China deal potentially in place, Americans today face an overall effective tariff rate of 17.8%, the highest since 1934, according to the nonpartisan Yale Budget Lab.
High tariff rates deepened the Great Depression in the 1930s, and the global economy is far more interconnected today than it was back then.
Even if a permanent trade deal with China can be secured, and even if that permanent trade deal does not raise tariffs from where they are at this moment, we are still going to experience a lot of economic chaos in the months ahead.
Economic activity is slowing down all over the planet, and layoff announcements just keep rolling in. For example, Nissan just announced that they will be giving the axe to approximately 20,000 workers…
Nissan is to cut almost 20,000 jobs globally as it sharply ratchets up plans to slash costs – and has not said whether its UK plant could be hit.
The Japanese car maker, which operates a factory in Sunderland, is planning to axe over 10,000 more jobs than originally planned as it seeks to make 400 billion yen (£2billion) in savings.
In November, the company launched a restructure which aimed to cut 9,000 positions – but reports from Japanese national broadcaster NHK suggest the firm has now more than doubled the number of workers it intends to cut.
So what is the bottom line?
The bottom line is that we should definitely be glad that the U.S. and China have dramatically reduced tariff rates for a period of 90 days.
If this had not happened, we would have soon been facing empty shelves and shortages.
But a 50 percent tariff rate on Chinese imports is still really going to sting.
The U.S. economy has been heading in the wrong direction for years, and this is certainly going to accelerate our problems.
There is much rejoicing for the moment, but it won’t be too long before the reality of what we are facing becomes undeniable.
Michael’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.
About the Author: Michael Snyder’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com. He has also written nine other books that are available on Amazon.com including “Chaos”, “End Times”, “7 Year Apocalypse”, “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, and “Living A Life That Really Matters”. When you purchase any of Michael’s books you help to support the work that he is doing. You can also get his articles by email as soon as he publishes them by subscribing to his Substack newsletter. Michael has published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and he always freely and happily allows others to republish those articles on their own websites. These are such troubled times, and people need hope. John 3:16 tells us about the hope that God has given us through Jesus Christ: “For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.” If you have not already done so, we strongly urge you to invite Jesus Christ to be your Lord and Savior today.