Trump’s Trade Chess Game Yields Major Victory as China Folds

Noah Stanton – In the complex game of international trade, knowing when to apply pressure and when to ease off requires the touch of a grandmaster. Like a chess player who sacrifices a pawn to gain positional advantage, sometimes the most powerful moves aren’t immediately obvious to casual observers.

When President Trump announced his sweeping tariff policy earlier this year, markets trembled and critics warned of economic catastrophe. The business press painted dire pictures of empty store shelves and skyrocketing prices. Warren Buffett himself called the tariffs “not right or wise,” and a Fox News poll showed only 33% of Americans approved of Trump’s tariff policy.

The trade war with China had escalated dramatically, with tit-for-tat increases that eventually reached astronomical levels – American tariffs on Chinese goods hit 145%, while China imposed 125% duties on American products. The S&P 500 fell 8% during Trump’s first 100 days back in office, leading many to question the wisdom of the approach.

But as experienced negotiators know, sometimes you have to be willing to walk away from the table to get the deal you want. This week, the strategy paid off in spectacular fashion.

In a stunning development that sent markets soaring, the United States and China announced a 90-day cooling-off period and a dramatic reduction in tariffs. During this pause, the U.S. will lower tariffs on Chinese products from 145% down to 30%, while China will reduce its tariffs on American goods from 125% to just 10%.

From Bloomberg:

“We are in agreement that neither side wants to decouple,” Treasury Secretary Scott Bessent said during a briefing in Geneva. The two countries had previously said they were making “substantial progress” in their talks.

The market response was immediate and overwhelming. The Dow Jones Industrial Average surged by 1,160 points, or 2.8%. The S&P 500 rose nearly 3.3%, and the tech-heavy Nasdaq soared an impressive 4.4%. Tech stocks in particular celebrated the news, with Amazon jumping 8.1%, Apple adding 6.3%, Nvidia gaining 5.4%, and Tesla rising 6.8%.

This isn’t just a temporary blip – this is the kind of substantial market movement that indicates renewed investor confidence. Wedbush analysts called the deal a “huge win for the market and bulls,” noting that it likely takes a near-term U.S. recession “off the table.” They described the tariff reduction as a “dream scenario” for tech companies that rely heavily on global supply chains.

What the mainstream media misses – or deliberately ignores – is that this outcome appears to have been the plan all along. President Trump, with his decades of business experience, understands that negotiations often require creating leverage. By demonstrating a willingness to endure short-term pain, he positioned America to secure better terms.

Consider what we’ve just witnessed: China, which had initially responded defiantly to American tariffs, has now agreed to reduce its duties to just 10% while accepting a U.S. tariff rate of 30%. That’s not a surrender – it’s a diplomatic victory achieved through strategic pressure.

It’s worth noting that all those apocalyptic predictions about empty store shelves and unaffordable goods never materialized. The American economy demonstrated remarkable resilience, and now we’re positioned to benefit from improved trade terms without suffering the catastrophic consequences that critics warned about. (Funny how they never issue corrections when their doom-and-gloom predictions fail to come true, isn’t it?)

I’ve watched this administration closely, and one pattern continues to emerge – Trump understands leverage in a way that career politicians and academic economists simply don’t. He’s willing to endure temporary discomfort and criticism to achieve long-term gains for American workers and businesses. How many times do we need to see this pattern before the “experts” finally get it?

This 90-day cooling-off period is just the beginning. With American leverage firmly established, I’m confident we can expect more favorable terms to emerge as negotiations continue. The statement from the U.S. said the parties would “establish a mechanism to continue discussions about economic and trade relations,” suggesting a framework for lasting improvements.

The next time you hear experts bemoaning Trump’s unconventional approach to international relations, remember this moment. While they wrung their hands and predicted doom, he was simply advancing his pieces across the economic chessboard. And now, as markets soar and China makes concessions, it’s becoming clear who the real grandmaster is in this game of global trade.

SF Source Stand For Freedom May 2025