A Shaky Hand in Washington
Asia’s major economies are breathing a little easier as President Donald Trump, faced with plummeting markets and corporate America’s angry doorstep visits, appears to be rethinking his trade war strategy.
Trump, who once talked tough with tariffs as high as 145% on China, now says he might “substantially” roll them back if a deal is struck. Whether this olive branch is real or just another gust of political hot air remains unclear. After all, barely a breath later, Trump fired off fresh attacks against China over canceled Boeing orders and the fentanyl crisis.
Still, signs are hard to ignore that Trump’s inner circle is sweating bullets. As markets tumble and the CEOs of Walmart, Target, and Home Depot stage an Oval Office intervention, Wall Street’s love affair with Trump’s economic agenda looks increasingly strained.
Asia Senses Opportunity
Across the Pacific, leaders from China, Japan, and South Korea are picking up the scent of vulnerability. Japanese Prime Minister Shigeru Ishiba and South Korea’s acting President Han Duck-soo now realize that Trump desperately needs a trade victory. This newfound leverage is like a rare Pokémon: too valuable to waste.
Meanwhile, President Xi Jinping is savoring the moment. His refusal to yield to Trump’s threats appears to be paying off handsomely, especially with his ongoing free-trade charm offensive winning applause across Europe and Asia. Compared to Trump’s scorched-earth tariff tactics, Xi is looking more like the calm adult in the room.
Markets in Meltdown, Allies on Edge
Back in the US, the cracks are widening. Reports suggest open brawls inside Trump’s team, particularly between trade hawk Peter Navarro and Treasury Secretary Scott Bessent. Economist David Rosenberg even declared that Trump “blinked” first, noting that the president’s retreat on trade, as well as his softer stance toward Federal Reserve Chair Jerome Powell, triggered a sharp market rally.
China, of course, is not missing the chance to rub it in with a diplomatic smile. As Foreign Ministry spokesman Guo Jiakun put it, China’s position is clear: “We don’t want to fight, but we are not afraid of it. If we fight, we will fight to the end; if we talk, the door is wide open.”
Final Thoughts
On one hand, Trump’s willingness to reconsider tariffs could prevent further economic self-destruction and global market chaos. On the other hand, flip-flopping under pressure could erode US credibility in future trade negotiations. Whether this is a strategic pause or simply a tactical retreat remains to be seen but for now, Asia is certainly enjoying the show.
