As the United States and China finally seemed close to reaching a trade deal months in the making, President Trump threatened a new round of tariffs on Beijing. In a pair of Sunday tweets, he gave a Friday deadline for a deal and threatened a penalty of 25% tariffs on Chinese imports if Beijing failed to comply. Normally such a threat from a U.S. president as they try to finalize a complex trade deal would be defining moment, but on Monday most everyone seemed to have shrugged it off by mid-afternoon.
The reason? Trump’s Twitter threats have lost their shine.
Sure, there were some market jitters, but panic and an initial stock market plunge shortly rebounded to a slight dip. Beijing, after initially considering pulling out of talks, nonetheless said that negotiators would be in Washington to continue trade talks on Wednesday.
And why shouldn’t they? On several previous occasions, Trump has threatened tariff hikes only to back off before the deadline. It’s not just that, Trump’s Twitter foreign policy doesn’t have a great track record: U.S. troops are still in Syria, North Korea is still a nuclear threat, and we (thankfully) haven’t yet abandoned our Kurdish allies.
By now, this routine is tired. So when Trump chimed in on Sunday with a comically bad plan threatening new tariffs, it didn’t stick. Wall Street and Beijing know what Trump hasn’t seemed to figure out yet: Imposing new tariffs on Friday would be so far out of line with U.S. interests that Trump and his advisers would be foolish to do it. Like many other similarly bad policy plans, the White House probably won’t follow through.
The only issue, of course, is that Trump has demonstrated a penchant for being unpredictable. Levying tariffs, even ones that are laughably bad for the country, can’t entirely be ruled out. Until Trump is prepared to consistently mean what he tweets, as Monday made clear, nobody’s buying his tough act.
