Donald Trump is in a huge battle with Chinese President Xi right now regarding tariffs.
Both countries are spitting venom at each other, but Trump is now saying it is nothing to be concerned about.
With tariffs starting to trickle down to consumers, I hope he is right.
I have stated many times that while Trump can wag that big stick at China, it is China that actually holds the leverage in this battle.
To that point, China flexed by boycotting the purchase of soybeans from the United States, and it has crippled soybean farmers in this country, who are seeing prices bottom out and endless bins of product being wasted before going to market.
China accounts for roughly half of all exported soybeans from US farmers, and that equates to more than 25% of the entire industry. Tell me what business can survive when it loses 25% of its business overnight.
This, among other issues, was supposed to be discussed at a proposed meeting between Trump and Xi.
The idea of that meeting was short-lived, as Trump backed out after some comments made by Chinese officials.
Trump stated, "Based on the fact that China has taken this unprecedented position, and speaking only for the U.S.A., and not other Nations who were similarly threatened, starting November 1st, 2025 (or sooner, depending on any further actions or changes taken by China), the United States of America will impose a Tariff of 100% on China, over and above any Tariff that they are currently paying.”
Trump then added, “Also on November 1st, we will impose Export Controls on any and all critical software."
This, obviously, only raised the temperature, and China fired back in kind.
Trump now insists that all of this is going to work out just fine and that Xi just had a bad day. This is a trade war neither country can really afford, but China is in a much stronger position than the United States financially, so, again, Trump has to be careful here.
Trump seemed to soften his tone this week, stating, “Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment.”
He later added, “He doesn’t want Depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it!!!”
As I have stated before, Trump has always used tariffs as a leverage tool, and it has worked wonderfully, except that Trump is not the one with the real leverage here. He has to get this fixed, and he has to get this fixed soon, or that trickle-down effect of tariffs is going to become a small wave, then a tsunami. And if that happens, well, I think we all know what happens then.
