by Mish Shedlock, Mish Talk:
This is no longer a highly unlikely scenario after Trump threatens another 50 Percent Tariff on China.
The lead image is from Chad P. Bown, Senior Fellow at PIIE.
Trump’s Social Media Threat
“If China does not withdraw its 34% increase above their already long term trading abuses by tomorrow, April 8th, 2025, the United States will impose ADDITIONAL Tariffs on China of 50%, effective April 9th,” he wrote on Truth Social.
TRUTH LIVES on at https://sgtreport.tv/
“Additionally, all talks with China concerning their requested meetings with us will be terminated!”
How We Got Here
- On “Liberation Day” Trump put an additional 34 Percent tariff on top of existing Biden and long-standing Trump tariffs.
- China retaliated with 34 percent tariffs.
- Today, Trump threatens an additional 50 percent tariff on China if China does not remove its retaliation.
Current and Proposed Setup
Megan Cassella: The average U.S. tariff on imports from China starting Saturday: 76%. That’s the 34% reciprocal tariff + 20% fentanyl tariff + Sec. 301 tariffs from the first term + baseline U.S. tariffs.
Not listed: The 25% tariff on buyers of Venezuelan oil, which a WH official tells me is not yet in effect. Official says TBD if that will stack on top, too. Also not clear to me when it will take effect, as the exec order said only that it would be “on or after” April 2.
Trump is vowing an additional 50% tariff on Chinese goods, effective Wednesday, if Beijing follows through with its announced retaliation.
That would bring the total tariff rate applied to Chinese goods to 104% so far this term, a White House official confirms to me.
At What Point Does it Cease to Matter?
That’s the question I asked Erica York, VP of federal tax policy for the Tax Foundation.
I have no answer yet. But as soon as we hit that point, additional threats by Trump are meaningless.
For example, there is no difference between 200 percent tariffs and 5000 percent tariffs because all trade with China will stop.
Revenue Zero
If trade ceases, income from tariffs that Trump claims will balance the budget will drop to zero.
And for his efforts, team Trump will not collect a cent but prices will jump. We call this winning.
