“Commerce Secretary Howard Lutnick, Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer have all been meeting with foreign officials seeking agreements to stave off the crushing tariffs President Donald Trump has threatened to impose next month.
But Trump’s three-headed negotiating team is often working at cross purposes, or at least that’s how it seems to 11 foreign officials, business leaders and advisers on trade talks, who say they are receiving mixed messages from different departments, in what one person close to the talks described as a contest for Trump’s loyalty.
Their differing approaches have occasionally slowed down progress, the foreign officials say, like when the Commerce Department tightened restrictions on some Chinese technology in May, quickly derailing an agreement with Beijing that was negotiated by Bessent.”
“Foreign manufacturers will have to lower their prices to accommodate tariff rates, Miran believes. If they don’t, then U.S. importers will turn to factories in other markets rather than absorbing the cost of tariffs themselves.
“We can move our demand across borders, but a factory can’t get up and move across borders,” he said.
You might say, his theory is that the customer is always right.
This line of thinking, a theme of his work since before he joined the administration, is an important way Miran’s reasoning diverges from that of most of his fellow economists. Critics point to examples — such as Trump’s tariffs on washing machines in his first term — where consumers seemed to be the ones who paid the price.
The question of who will bear the cost burden of import taxes is an important puzzle piece for gaming out how much inflation will rise and how much growth will slow. It is a particularly critical dilemma for the Federal Reserve, which is trying to decide when to ease off the decelerating economy.”
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“For this to work, foreign firms have to believe that, unless they capitulate, U.S. companies really will relocate their supply chains elsewhere, Miran told me. That’s one of the many tricky parts for proponents of Trump’s agenda — and Miran conceded as much.
“The truth is that for a lot of products, there’s not a credible alternative for a supply chain available instantaneously, right?” he said.
The recalibration, in other words, will take some time.
And that time could come at a price for the economy, as Trump’s shifting tariffs and fluid negotiations leave businesses hesitant to take action. If firms knew where tariffs would land, they could make investment decisions — on where to build factories, on what size workforce they need, on whether they need to change their business model. In the meantime, many executives are frozen in place, a paralysis that itself could take a bite out of growth.
Right now, manufacturers have been scaling back production as new orders dry up, and confidence in business conditions among CEOs collapsed during the second quarter at its fastest pace in roughly half a century.
Miran was straightforward about acknowledging that policy uncertainty is a challenge, repeatedly suggesting that there could be volatility — in growth, in prices — ahead.”
“China has a virtual monopoly in the sector, dominating the entire supply chain from the extraction of rare earths to their processing and the manufacture of permanent magnets.
According to the International Energy Agency, the country accounts for some 61 percent of rare earths extraction and 92 percent of refining. Moreover, it provides nearly 99 percent of the EU’s supply of the 17 rare earths, as well as about 98 percent of its rare earth permanent magnets. Global demand for these minerals is expected to increase by 50 to 60 percent by 2040.”
“When industries can boost profits more easily by lobbying for tariff exemptions than by competing in the marketplace, they will—and those incentives grow stronger as government intervention in the economy increases.”
Wealthy people and great entrepreneurs aren’t going to not start that great business because they will pay more taxes if they make it big. Either way, if successful, they would have done something great and will be rich.
The most profitable and flexible workforce for Americans is illegal immigrants.
When we put tariffs on China, we are saying every country on Earth can get low inputs from China except America, making American business less competitive.
“Trump unilaterally imposed tariffs on much of the world. Yet the president has no such authority under Article II of the Constitution, which enumerates the limited powers of the executive branch. Instead, the authority “to lay and collect Taxes, Duties, Imposts and Excises,” as well as the authority “to regulate Commerce with Foreign nations,” resides exclusively in Article I, which is where the limited powers of the legislative branch are detailed.
So, Trump’s trade war violates the constitutional separation of powers because Trump has unlawfully exercised power that the Constitution placed in the hands of Congress, not in the hands of the president.”
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“As a pretext for his trade war, Trump invoked the International Emergency Economic Powers Act (IEEPA). Yet “the statute is silent on tariffs, and for good reason. It was never meant, and has never been understood, to authorize the President to impose them.” That observation comes from a superb friend of the court brief filed by a cross-ideological group of legal scholars and former government officials in support of the legal challenge against Trump’s tariffs. Their brief thoroughly explains why Trump’s use of the IEEPA to fundamentally remake the American economy cannot be reconciled with any law passed by Congress. In short, Trump’s tariffs flunk the test imposed by the major questions doctrine.”
“By examining alternative studies and methodological adjustments, Winship contends that the negative effects of trade with China have been significantly exaggerated and that populist narratives blaming this trade for U.S. economic decline aren’t supported by rigorous evidence.
The originators of the China shock theory examined how Chinese imports affected certain U.S. locales compared with others—not with the entire country—based on initial industry composition and employment size. By these metrics, areas heavily exposed to Chinese imports showed disproportionately worse manufacturing job losses.
However, Winship points out that even if we accept these estimates, the findings suggest only relatively modest employment effects.
To put things in perspective, Winship gives the example of two hypothetical commuting zones with 200,000 working-age residents and 20,000 manufacturing workers. Data from the theory’s proponents indicate that moving from low (10th percentile) to high (90th percentile) exposure to Chinese imports would result in a loss of roughly 2,700 manufacturing jobs—just a 1.4-percentage-point drop in overall manufacturing employment.”
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“In addition, Winship flags multiple methodological issues. Once other economists revised the proponents’ methods, the estimated negative impact shrank dramatically. Various followup studies found the China shock effect on manufacturing employment to be 50 percent smaller than initially claimed.
Further research revealed that job losses in exposed areas were often offset or even outweighed by employment gains in other sectors. One detailed Census Bureau study even found that firms with greater Chinese import exposure increased manufacturing employment, reallocating jobs to more efficient domestic production lines enabled by cheaper imports.
Moreover, the steady decline in U.S. manufacturing employment began decades before China’s WTO entry. Between the late 1970s and 2000, factory employment had already decreased substantially, mostly because of technological advances and shifting consumer demand.
Notably, there was no sudden acceleration of this decline after China joined the WTO. The rate of manufacturing job losses remained consistent with earlier trends, undermining claims that Chinese trade uniquely devastated American manufacturing.
Furthermore, former manufacturing workers generally did not face permanent unemployment. In fact, unemployment rates among this group were lower in recent years compared to the late 1990s, before the peak of Chinese imports. Many workers transitioned successfully into other sectors, belying the notion of an enduring displacement crisis. It’s also worth noting that there are around half a million unfilled manufacturing jobs today.”
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” evidence from Trump’s first term showed that his tariffs often hurt American firms more than their foreign competitors. With broader and higher tariffs, we can only fear the worst.”
“As CEO of Plattco Corporation, a small business that makes industrial valves, Derrigo-Barnes runs the sort of blue-collar industrial production shop that Trump and his allies say they want to help. Instead of being helped, she found herself dealing with fallout from the tariff announcement: canceled orders, higher prices, and enough uncertainty to put on hold a planned expansion of the company’s Plattsburgh, New York, manufacturing center on the banks of Lake Champlain.
What would she tell Trump if she got the chance? “Stop the nonsense. We’ve worked hard to get us to a place where we can perform well and we can take care of our customers, and this is putting that in jeopardy.””