Alex Brandon/AP Photo
President Donald Trump watches as Treasury Secretary Scott Bessent participates in a ceremonial swearing in of Paul Atkins as chairman of the Securities and Exchange Commission, in the Oval Office of the White House, April 22, 2025, in Washington.
On Monday, I wrote about Treasury Secretary Scott Bessent’s role as the sole grown-up in the room. Bessent has repeatedly talked Trump of the ledge, first to persuade him to suspend “Liberation Day” global tariffs, next to back off the gross weaponization of the IRS, and then to stop threatening to fire Fed Chair Jay Powell. Anxious financial markets saw Bessent as an oasis of sanity and rallied accordingly.
But on Monday, banging out a post on Truth Social, Trump doubled down on his crude attacks on Powell, calling him “Mr. Too Late, a major loser.” Markets then plummeted more than 2.7 percent.
Now, however, the plot thickens again. On Tuesday, the Dow rose almost 1,000 points on comments by Bessent at a conference sponsored by JPMorganChase that a deal with China might be in the offing. “No one thinks the current status quo is sustainable,” Bessent told the gathering.
Markets assumed that this was a deliberate leak of another pending policy reversal. And it was.
Later yesterday, a kinder and gentler Trump emerged, almost as if he had switched his meds. Speaking to reporters in the Oval Office, Trump said that tariffs on goods from China will “come down substantially,” adding that “we’re going to be very nice and they’re going to be very nice, and we’ll see what happens.”
On the subject of the Fed chair, Trump said that he had no intention of firing Powell: “Never did,” Trump told reporters. “The press runs away with things. No, I have no intention of firing him.” Silly press, reporting what Trump says.
The Wall Street Journal quotes a senior White House official saying that China tariffs would go down between 50 and 65 percent and could be phased in over five years.
It’s not clear whether the China policy had already changed when Bessent spoke to the JPMorganChase meeting, or whether Trump followed Bessent’s lead. What is clear is that market anxiety gives Bessent special powers as the Trump whisperer. At this writing, the Dow is way up again.
Meanwhile, the China grand bargain remains in the realm of wishful thinking. Trump and Chinese President Xi still have not spoken, and the Chinese are now bragging that Trump blinked first—which indeed he did.
“Trump chickened out” was the top trending topic on China’s Weibo social media website on Wednesday, with more than 150 million views. In bargaining terms, Trump’s ploy ended up strengthening Xi’s hand.
Trump blinked first because his tariffs were doing far more damage to the U.S. economy than to China. Tariffs of 145 percent are the equivalent of a total boycott. A wide range of consumer and producer goods reliant on Chinese supply were abruptly shut down. And China’s retaliatory tariffs were on the verge of devastating American agriculture.
The largest U.S. export to China is soybeans, which totaled 27 million metric tons last year, valued at $12.8 billion, or about 9 percent of all U.S. exports to China. That equals more than half of all U.S. soybean exports.
In the next few days, we are likely to see some kind of handshake deal in which China agrees to buy more stuff from the U.S., Trump cuts the super-tariff on China, and a joint task force is announced to address structural issues. The problem is China’s entire mercantilist system, whose revision does not lend itself to a quickie grand bargain.
Even with a less mercurial president, China is far better positioned to play the long game than the U.S. China’s time horizon is centuries if not millennia. Trump’s attention span is in days or hours.
Once again, we are likely to see Trump declaring victory by ending a crisis created by reckless, self-defeating policies that he never should have imposed in the first place. This will lead to no substantive progress on the real issues dividing China and the U.S.
Was there some method in Trump’s madness? Nope, it was just plain madness, a series of tantrums pretending to be a policy.
