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Do not believe the president and his sycophants. The deal that drops the tariff on Chinese products will transfer billions from your pockets to America’s rich.
The tariff deal between Trump and China does nothing
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Summary
The speaker dissects Trump’s so-called “tariff deal” with China and explains how even a dramatic cut from a punitive 145 percent to 30 percent still leaves import taxes far above the pre-trade-war norm, shifting the entire burden onto U.S. consumers and small businesses while shielding large corporations that can negotiate special breaks.
- Trump’s original tariff hikes raised average duties on some Chinese goods from roughly 3 percent to as high as 145 percent.
- The new agreement reduces those duties to 30 percent for 90 days, which is still a tenfold increase over pre-2018 levels.
- Eliminating the de minimis $800 exemption means micro-importers and home-based businesses now pay the same steep tariffs as corporate giants.
- Tariff revenue ultimately funds the 2017 tax cuts for the wealthy, making working-class Americans shoulder the cost of upper-income giveaways.
- Congress, not the president, has constitutional authority over tariffs; voters must pressure lawmakers to restore fair trade rules and the de minimis threshold.
From a progressive perspective, the episode exposes Trump’s faux-populist playbook: he inflates a crisis, “fixes” it with a halfway measure that still punishes ordinary people, and funnels the proceeds toward the rich. Grass-roots organizing and congressional action are essential to end this regressive stealth tax and to build a trade policy that supports small businesses, living wages, and equitable economic growth.
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Donald Trump’s self-styled “truce” with Beijing—heralded as a 90-day reduction of U.S. tariffs on Chinese imports from a punitive 145 percent to 30 percent—makes for slick headline politics but brutal kitchen-table economics. Stripped of the spectacle, the agreement locks in a level of import taxation that still dwarfs the pre-Trump norm and cements a stealth tax on those who can least afford one. Average tariffs on Chinese-made goods were roughly 3 percent before the trade war; even after last week’s handshake, they settle around 40 percent once one adds the administration’s universal 10 percent “reciprocal levy” and sector-specific add-ons.
Trump’s apologists insist that a 115-percentage-point climb-down counts as relief. However, the Peterson Institute’s real-time tariff tracker shows that the average duties on all Chinese imports still exceed 50 percent, more than fifteen times the 2017 baseline and five times the world average borne by American families. Meanwhile, Washington’s tariff wall on every other trading partner now averages 11.7 percent, nearly quadruple the pre-war level. These are historically high “everyday taxes,” levied not by Congress but by executive fiat under an emergency decree.
Economists have long known who pays such levies. New York Fed researchers documented complete pass-through into consumer prices during the initial 2018 rounds, calculating a $419 annual surcharge for the median household at just a 10–25 percent duty level. With several multiples higher statutory rates, today’s burden climbs well north of a thousand dollars for working-class families navigating stagnant wages and spiraling rents.
Small businesses—supposedly the administration’s populist constituency—suffer a double punch. First, the White House eliminated the $800 de minimis duty-free threshold that let artisans and local retailers import low-value inputs at no extra cost; then, under last week’s order, it merely “cuts” the new surcharge from 145 percent to a still-crippling 30 percent. Global giants armed with lobbyists negotiate bespoke carve-outs, but the neighborhood print shop or Etsy start-up must swallow the full tariff or shutter. Reuters notes that the once-vibrant micro-import channel that enabled millions of home-based enterprises now faces duties higher than most corporate income tax rates.
The White House pitches tariffs as patriotic revenue, a claim with two fatal flaws. First, the Tax Foundation shows that the current levy mix would raise roughly $2 trillion over the decade, revenue that barely dents and offsets the cost of extending the 2017 tax cuts, whose benefits flow overwhelmingly to high-income filers. Second, tariff incidence is sharply regressive: lower- and middle-income households lose 1.2 percent of after-tax income, while the top five percent lose only about one percent. Put plainly, Trump is financing tax breaks for the wealthy with a consumption tax on everyone else.
Nor will the duties deliver on the promised macro outcomes. Peterson Institute modeling indicates that even a uniform 30 percent tariff fails to narrow the trade deficit; instead, it slows growth by 0.6 percent, suppresses exports, and encourages dollar appreciation, making U.S. industry less, not more, competitive. Joseph Gagnon’s February analysis is blunt: higher tariffs correlate with larger external shortfalls because currency and capital-flow dynamics swamp any import reduction.
Trump’s defenders answer with an ideological sleight of hand: they conflate “making China pay” with “making America strong,” refusing to admit that import taxes fall on domestic purchasers. The administration then sprinkles discretionary waivers on politically connected firms, from automakers to petrochemical conglomerates, reproducing the cronyism it denounces abroad. Meanwhile, moms shopping for diapers at Walmart or workers repairing a Ford F-150 pay the premium these headline-grabbing duties create.
Progressives would flip the script. Congress—constitutionally empowered to set tariffs—should rescind the emergency declaration, restore the de minimis threshold that nurtures Main-Street entrepreneurship, and replace blanket levies with targeted, democratically debated industrial policies: strategic public investment in climate tech, universal childcare that lowers family expenses, and an excess-profits tax on megacorporations that offshore jobs. Paired with enforceable labor and environmental standards in trade agreements, such a framework would lift wages without weaponizing consumer prices.
Ultimately, the Geneva “deal” exposes the bankruptcy of Trump’s economic populism. It masquerades as a concession while leaving the structural squeeze intact: higher checkout prices, fragile supply chains, and a widening chasm between the fortunes of the billionaire class and the lived reality of America’s working majority. The path forward lies not in tariff theatrics but in mobilizing that majority to demand a trade policy rooted in solidarity that raises standards abroad and reins in corporate greed at home. It frees the United States from the false choice between austerity and xenophobic protectionism.
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