The White House

has eased tariffs on China after warnings of potential harm to Trump’s supporters, also known as “Trump’s people”. Here’s what’s happening:

– Tariff Pause:

The Trump administration announced a 90-day pause on escalating tariffs with China, reducing the tariff rate from 125% to 10%. This pause aims to mitigate potential economic harm and give both countries time to negotiate.

– Impact on Prices: The tariffs, if fully implemented, would have increased prices for consumers and businesses importing goods from China. By pausing the tariff escalation, prices might stabilize or decrease.

– Tariff Timeline: The tariff history is complex, but key dates include:

    – February 4, 2025: 10% tariffs on all imports from China took effect.

    – April 2, 2025: “Reciprocal” tariffs were announced, with rates varying by country based on trade balances.

    – April 9, 2025: Tariffs on China were set to increase to 125%, but were later paused.

    – May 12, 2025: The Treasury Secretary announced the 90-day pause on escalations with China.

Economic Effects

The tariffs imposed by the Trump administration have significant economic implications ¹:

– GDP Impact: The tariffs are estimated to reduce long-run US GDP by 0.7%, with potential retaliatory tariffs from other countries further reducing GDP by 0.2%.

– Job Impact: The tariffs could lead to a loss of approximately 685,000 full-time equivalent jobs.

– Revenue Impact: The tariffs would increase federal tax revenue by $2.1 trillion over the next decade on a conventional basis, but this estimate decreases to $1.4 trillion when accounting for negative economic effects.