Markets were jumping for joy at news of President Trump's lightning-fast trade deal with China over the weekend in Switzerland, lowering tariffs on both sides.
According to the New York Post:
The US and China have agreed on a deal to help resolve the trade war raging between the world’s two largest economies, top Trump administration officials announced Sunday.
Details of the deal — struck during negotiations in Switzerland over the weekend — were not revealed, but officials teased that more information will be shared on Monday.
“The U.S. has a massive $1.2 trillion trade deficit, so the President declared a national emergency,” US Trade Representative Jamieson Greer said Sunday. “We’re confident that the deal we struck with our Chinese partners will help us work toward resolving that national emergency.”
Tariffs would go back to Trump's baseline 10% for China, plus a 20% add-on based on China's failure to curb the fentanyl trade. China would issue a reciprocal 10% back on the U.S., and promises to buy more U.S. agricultural products.
According to Investor's Business Daily, that set the stage for some happy stocks:
The U.S.-China trade deal announced in Geneva early Monday far exceeded Wall Street expectations, with both countries slashing tariffs. The S&P 500 is set to open at its highest level since March 5, nearly a month before the imposition of reciprocal tariffs sent markets plunging and set in motion a test of wills between President Trump and Chinese President Xi Jinping. ... The deal announced on Monday essentially gives China the same deal that the U.S. gave to every other country on April 9, temporarily reducing reciprocal tariffs to 10% during a 90-day negotiation period.
It speaks well for the negotiating prowess of Treasury Secretary Scott Bessent and his partner, U.S. Trade Representative Jamieson Greer who had their biggest trade deal in front of them over the weekend.
Charlie Gasparino outlines why:
But the nitty gritty is still to come on some details, and Fox News's Elizabeth MacDonald has more good scoop material as a result.
She outlines the conventional wisdom here, which is kind of absurd, claiming Trump somehow caved in to China. How they can say that, given the 20% tariff slap at China over its fentanyl exports, is beyond me, but here we are.
The simplistic hot takes - Trump
— Elizabeth MacDonald (@LizMacDonaldFOX) May 12, 2025
raised tariffs, markets rebelled, Trump backed down w China - are misleading and don’t take into account the major difficulties, complexities and unfairness the Trump team is trying to fix for the U.S. & the world. See tweet below. China again is… https://t.co/DWUuNUZPfO
Then she gets into some interesting stuff:
Got fascinating detail on China’s demands in the U.S. trade talks - major concerns for the Trump team and the U.S. Am still working sources, more to come.
— Elizabeth MacDonald (@LizMacDonaldFOX) May 12, 2025
It really wants to invest in U.S. artificial intelligence, which the U.S. opposes as it’s critical to U.S. national… pic.twitter.com/IQKNK5hmMz
Says China wants to 'invest' in artificial intelligence and get its hands on more American chips and quantum computing. That would be the better to strengthen its social credit system tyranny, and for that matter, collect information on the rest of us, I suspect.
It wants to be recognized as a market economy, which is nonsense, given its crony capitalism as permitted by the state, and get even more favorable treatment under the World Trade Organization (WTO) than it already is.
A lot of that stuff looks like pretty hard 'no' material, given the problems China has caused because the U.S. has been so tolerant of its bad acts.
What it sets the stage for is a U.S. call for it to create a real market economy, which of course, would be a revolution. China's old gray men of the forbidden city know better than that, but if the Trump team can lure them into doing it for real, something beautiful may happen.
In the meantime, there is this respite and a long road to go. But so far, so good, the Trump team is showing its typical competence once again.