Donald Trump’s tariffs have left the U.S. teetering on the edge of a recession, with even Fox News hosts voicing their concerns about the president’s import levies.
Fox Business senior correspondent Charlie Gasparino told colleagues on Thursday’s edition of The Story that despite his bullish trade tactics, Trump has a “weak negotiating hand” that has left the markets “on edge.”
“We need people to buy our debt, and China supplies us with a lot of cheap goods,” he said. “We can see inflation rise up dramatically. And Xi [Jinping] knows this.”
Trump’s “Liberation Day” tariffs sent shockwaves throughout global markets when they were announced earlier this month, with the president instigating a full-blown trade war after raising tariffs on imported Chinese goods to 145 percent—with China imposing similar reciprocal levies on U.S. imports.
While Trump has since attempted to walk back some of the tariffs while he “makes deals” with other countries, Beijing has remained firm, and the threat of a trade battle between the world’s two economic superpowers has sent stock markets tumbling.
Gasparino pointed out that businesses are “ratcheting back their spending” because of the uncertainty caused by the tariffs, which is causing U.S. markets to suffer while China stands firm.
“So, they’re planning as if these things are still in place,” Gasparino said. “One other thing you should point out is that we have a weak negotiating hand here. I know the president keeps saying we don’t. We’re almost in a recession. We have markets that are on edge.
“That’s the big kahuna,” he added. “The iPhone is manufactured a lot in China. If you don’t deal with that, you could have some real economic problems here.”
In a sign that the market pressure is starting to get to Trump, the president admitted on Tuesday that the Chinese tariffs will not be as high as he previously said they would be.
“One hundred forty-five percent is very high, and it won’t be that high,” Trump told reporters in the Oval Office. “It won’t be anywhere near that high. It’ll come down substantially. But it won’t be zero.”
The announcement was widely seen as an admission that Trump had caved into the pressure on Beijing, with the Wall Street Journal declaring “China Called Mr. Trump’s Bluff and Seems To Have Won This Round.”
In a scathing editorial, the Journal wrote: “When Mr. Trump imposed his tariffs in the first term, President Xi Jinping retaliated with some restraint and sent a delegation to negotiate a trade deal. This time he retaliated in tit-for-tat fashion and pushed all of his anti-U.S. economic and diplomatic levers.
“Beijing has also warned countries not to do trade deals with the U.S. that exclude China—or else. With even U.S. allies facing Mr. Trump’s tariff assault, Beijing’s threat has resonated in a way that it never previously did. U.S. diplomatic sway is ebbing.”
Meanwhile, big box CEOS have warned Trump that his trade policy will result in “empty shelves” unless his dramatically changes course in the coming weeks.
“The big box CEOs flat out told him the prices aren’t going up, they’re steady right now, but they will go up,” a White House official told Axios on condition of anonymity. “And this wasn’t about food. But he was told that the shelves will be empty.”
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