Trump Must Make A Trade Deal To Avoid Consumer Pain

US President Donald Trump’s former adviser has divulged the thinking in Washington behind pushing for a mini trade deal.

Clete Willems, the former White House negotiator, says Trump must make a deal because any further tariffs on Chinese goods will hurt the American consumer in the pocket.

Willems revealed the White House ran complicated algorithms to stress test how much damage Trump’s tariffs would inflict on the US and Chinese economies.

“The administration designed the tariffs so that the initial tranche would be much more impactful to China than to the United States,” he said.

Willems left his job as deputy director of the National Economic Council in April after spending some time as special assistant to Trump for trade and economics.

No pain, no gain for Trump

The aim of the tariffs, he explained, was to cause maximum pain for China while minimising pain for US consumers.

“The more tariffs you put into place, eventually you’re going to get to the ones that hurt the US more than China and we’re getting there now,” said Willems.

“I think that there was a legitimate recognition among folks in and around the White House that these new sets of tariffs would be more detrimental to the United States than earlier sets of tariffs. That has created an incentive to try to figure out if there’s a way to make some progress before they go into effect.”

Avoiding sensitive issues

The talks are in phase one after 15 months of tit-for-tat tariffs. Beijing demands Trump should lift all tariffs on Chinese goods if he wants the talks to go ahead.

No doubt, the Chinese are aware that imposing further sanctions will start to bite on the spending power of Americans, especially as Trump approaches an election year.

But his threat of more tariffs starting December 15 is still on the table, and it’s unlikely China will sign off a mini deal before then unless the threat is lifted.

Employing typical hyperbole, Trump calls the mini deal the ‘greatest and biggest deal ever made’ but both sides are putting off agreement on sensitive issues like intellectual property rights and technology thefts.