While this week wasn’t quite as eventful as the first few weeks of April, there’s still some things happening beneath the surface that manufacturers and distributors should be aware of.
In this week’s recap, topics include:
While the trade war with China has escalated dramatically over the past few weeks, it would appear that the worst is behind us.
On Tuesday, Treasury Secretary Bessent said at a private investment conference that the trade war with China is unsustainable and he expects it to de-escalate in the near future. Afterwards when asked about these comments, Trump confirmed this, stating “145% is very high and it won’t be that high… It’ll come down substantially. But it won’t be zero.”
With that being said, the status of any negotiations remains unclear. While the Trump administration has indicated in previous weeks that China has been “reaching out a lot to start trade talks”, on Thursday, Chinese Commerce Ministry spokesman He Yadong dismissed this, stating “I want to emphasize that there are currently no economic and trade negotiations between China and the United States, and any reports on development in talks are groundless and have no factual basis.” He also went on to say that “The US should respond to rational voices in the international community and within its own borders and thoroughly remove all unilateral tariffs imposed on China, if it really wants to solve the problem.” These remarks suggest that Trump’s comments this week about lowering tariffs on China will not be enough to de-escalate tensions.
Afterwards though, Trump denied this claim, stating “They had a meeting this morning,”. But when pressed on which administration officials were involved in discussions, Trump said, “it doesn’t matter who ‘they’ is. We may reveal it later, but they had meetings this morning, and we’ve been meeting with China.” Also when asked about whether Xi had called him, Trump stated “Yep. He’s called. And I don’t think that’s a sign of weakness on his behalf.”
Also on Thursday, Trump criticized Beijing for refusing to take deliveries of Boeing Co. jets and for its role in the trade of illegal fentanyl, posting on his Truth Social account that “Boeing should default China for not taking the beautifully finished planes that China committed to purchase. And, by the way, Fentanyl continues to pour into our Country from China, through Mexico and Canada, killing hundreds of thousands of our people, and it better stop, NOW!”
While we don’t know exactly what’s on the table for these negotiations, Treasury Secretary Bessent has stated that instead of a hard break or complete decoupling between the U.S. and China, the goal is to have a rebalancing of trade.
Lastly, in another interesting turn of events, reports emerged Friday indicating that China has quietly rolled back tariffs on some semiconductors and pharmaceuticals, and is also considering granting tariff relief on medical gear and chemicals. This would suggest that talks are in fact underway between the two countries.
As we’ve touched on in previous recap articles, 100+ countries reached out after Trump’s reciprocal tariff plan was rolled out earlier in the month. This was one of the main reasons that the administration decided to place these on pause until early July. And while Trump has said he’s willing to negotiate with countries, he’s also repeatedly stated he’s in no rush to do so and that they’ll have to take the initiative. This week, he also put pressure on countries that haven’t reached out to negotiate or are playing hardball, stating Wednesday that “if we don’t have a deal with a company or a country, we’re going to set the tariff. I’d say over the next couple of weeks, wouldn’t you say? I think so. Over the next two, three weeks. We’ll be setting the number.” This would indicate that these country-specific tariffs could be reimplemented much sooner than July in some cases.
As far as what’s expected from these countries if they want to avoid these new tariffs, the administration has indicated that at minimum these countries need to be prepared to drop their own tariffs and curb any acts of non-tariff cheating like intellectual property theft. Additionally, the plan is to ask trade partners to disallow China to ship goods through their countries and prevent Chinese firms from setting up shop within their borders in an attempt to avoid the tariffs.
For now though, we don’t really know the exact details of these negotiations and probably won’t for at least a few weeks, which Trump confirmed in an interview published Friday with Time Magazine when he stated that he would announce them “over the next three to four weeks,” once the negotiations are “finished.”
Some of the negotiations that took place this week include:
South Korea ($66B trade deficit)
On Thursday, Treasury Secretary Scott Bessent indicated that the U.S. and South Korea could reach a trade agreement as early as next week, telling reporters "We may be moving faster than I thought. We will be talking technical terms as early as next week, as we reach an agreement on understanding as soon as next week. South Koreans came early, they came with their A game. We will see if they follow through.” Read more.
India ($45.7B trade deficit)
Following a trip to Rome last week, Vice President JD Vance made a trip to India on Monday, where he met with Prime Minister Modi. Afterwards, they announced that they had agreed on a “roadmap” for negotiations over a trade deal. As reported by Bloomberg on Friday, the discussion will cover 19 categories including greater market access for farm goods, e-commerce, data storage, critical minerals, and more.
Norway ($2.0B trade deficit)
On Thursday during a meeting with Norwegian Prime Minister Jonas Gahr Store, Trump expressed optimism about the chances of reaching a new deal, stating “we talked about trade, and we will definitely - we get along very well on trade. We’ll do something.”
Other countries that negotiations are underway with include: Japan ($68.5B trade deficit), Italy ($39.7B trade deficit), and the U.K. ($11B+ trade surplus)
Additionally, Trump will be attending the funeral of Pope Francis in Rome on Saturday, and when asked Wednesday whether he would use it as a chance to meet with other world leaders he stated: “Yes, I will. I would like to meet them all… They all want to meet about trade.”
We’ll be covering this more in next week’s article as new details are revealed.
On Wednesday evening, Trump suggested that he might increase tariffs on cars from Canada, stating “They took a large percentage of the car industry and I want to bring it back to this country. I really don't want cars from Canada. So when I put tariffs on Canada, they're paying 25%, but that could go up in terms of cars. When we put tariffs on, all we're doing is saying we don't want your cars.” Additionally, Trump indicated a deal with Canada is in the works, stating “We are working on a deal. We will see what happens.” Read more.
While Trump exempted cars from his reciprocal tariffs, the industry is still subject to both the 25% tariffs on steel & aluminum as well as the 25% tariff on all imported vehicles. On Wednesday however, the White House confirmed that Trump is planning to exempt auto parts from tariffs he’s hit China with, as well as the 25% duty on imported steel and aluminum. Read More.
On Wednesday, the White House announced they had started an investigation into the need for tariffs on imports of medium and heavy duty trucks and parts. According to the Federal Register notice, The Commerce Department will probe the national security risks stemming from a “small number” of foreign suppliers that it says have dominated U.S. imports in part due to government subsidies and “predatory trade practices.” Then officials will determine if domestic producers can meet U.S. demand and the potential for foreign nations to “weaponize their control over supplies and truck parts by using export restrictions. For clarification, trucks weighing more than 10,000 lbs as well as parts and derivatives will be subject to investigation.
Other similar investigations are already underway for pharmaceuticals, semiconductors, lumber and copper. While these investigations typically take up to 270 days, the Trump administration is pushing to execute these much faster, and findings from investigations into semiconductors and pharmaceuticals are expected to be announced in the upcoming few weeks. Read More.
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We’ve recently launched our U.S. Manufacturing Today Podcast. Hosted by our Head of Reindustrialization Matt Horine, this podcast intends to help you cut through the noise you’re seeing across constructed narratives and provide clarity around these once in a generation policy shifts and their impact on the U.S. manufacturing sector.
In this week’s episode, American Truckers United Co-Founder Shannon Everett joins host Matt Horine to discuss how the rise in non-domicile CDLs, wage dumping, fraud, and illegal immigration in the trucking sector is putting both livelihoods and public safety at risk. Shannon also outlines survival strategies and necessary reforms to protect American truckers, emphasizing the importance of both legislative action and public support.
You can find this episode here on our website, or on Spotify, Apple Podcasts, YouTube, or PocketCasts.
For more information on the changes taking place under Trump 2.0, make sure to check out our “Navigating Trump 2.0” page. Here you’ll find a breakdown of what’s happened so far and what’s potentially to come, as well as a plethora of blog articles laying out how businesses can position themselves to thrive in this environment.
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