You can’t bully a supply chain superpower

President Donald Trump’s trade deal with China, announced this week, is vague to be sure. But it seems to follow the familiar arc of what a Financial Times commentator has cleverly dubbed the “TACO” trade — the market view that “Trump Always Chickens Out” — with one twist.

The deal amounts mostly to a rollback to the state of affairs before Trump began his trade war, except that Americans will still pay a tariff rate of 55 percent on goods from China (compared to China’s 10 percent tariff on American goods). Trump’s tariffs will cause pain — but more to America, not China. Economist Dean Baker notes that in light of these tariffs, the World Bank now says that U.S. growth is projected to slow from 2.8 percent last year to 1.4 percent. And yet, China’s growth rate is expected to stay the same as the previous projection. It’s clear who is paying for Trump’s “Liberation Day.”

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