Long-term national policy or negotiation method? How to understand Trump's "crazy tariffs"?

Author: Alex Xu , Mint Ventures

Last week at 4 p.m. Eastern Time on April 2 (after the U.S. stock market closes), Trump announced his "peer-to-peer tariffs".

He divided the surplus of physical trade with the United States last year by its total commodity exports and then divided by two to obtain a new "reciprocal" tariff rate.

Where is the logic? unimportant.

People only need an excuse to start a war.

The global market, including crypto assets, then fell into a bloody storm.

The current market's chaotic expectation of Trump's tariff plan is: is the long-term national policy of the Trump team, or is it a negotiation strategy used to seek benefits with negotiating parties (trading partners, large enterprises)?

If it is the former, then perhaps as many people say, this will change the global trade situation. The United States is moving towards isolationism, which is obviously unfavorable to the global economy in the long term.

But if it is the latter, then perhaps the moment when the so-called "reciprocal tariffs" were issued on April 2, it was the peak of fear of this round of trade war. The subsequent development direction was still the gradual reach of consensus between the United States and bilateral and multilateral as negotiations progressed. The market panic gradually faded, and asset prices returned to the level it should have.

Although Trump has previously promoted tariffs as a "national policy" when talking about tariffs during the campaign and after taking office, he has promoted them more as a "national policy". By forcing the manufacturing industry back through tariffs, it is also a political commitment to the rust zone and the voters at the bottom, and his attitude is also extremely firm.

But the author still tends to be that tariffs are just his bargaining chips, and the ultimate goal of his negotiation is to gain enough political achievements for him, which may include:

• More overseas orders: Other countries purchase more American goods (food, energy, weapons, passenger aircraft)

• More local job opportunities: Large companies come to the United States to invest and build factories (TSMC)

• Rational encirclement of competitors: forcing countries that attempt to ride on the fence to join forces with them to further encircle China (Today, Vietnam and South Korea have announced high tariffs on China's steel exports)

In addition, the expected asset plunge and recession caused by tariff disturbances also put huge pressure on the inactive Powell. Trump cannot cut interest rates through executive forces. What about the economy and stock markets that are on the verge of collapse?

Therefore, as long as he and his group can withstand the current huge pressure, when the seemingly illogical tariff requirements gradually convert into results in negotiations, his reputation will gradually reverse.

These results will all translate into its energy to further strengthen its political influence, serve as a reason for its further expansion of power, and help the Republicans gain an advantage in next year's midterm elections.

So is there a possibility that Trump really regards tariffs as a long-term national policy, believing that tariffs can force the manufacturing industry to return, transform the current hollowing out of the US manufacturing industry, and provide more jobs?

But the problem is that neither space nor time is allowed. The two houses will have midterm elections next year. The economic recession, stock market crash and asset inflation caused by long-term high tariffs will surely make the Republican Party lose the current weak House of Representatives (even the Senate), making Trump a "lame president" for the remaining two-year term, making it even more difficult to implement the policy.

There is not enough time and space for him to implement such a long-term national policy. When the stock market is not good or the tokens are not good next year, he will not be able to hold it in the short term, let alone the long-term national policy.

So this possibility is relatively small.

In fact, from the current perspective, less than a week after the reciprocal tariffs were introduced, with contact with many countries and the actual negotiating interests were confirmed, the Trump team's tone of tariffs has begun to soften.

For example, today, Kevin Hassett, director of the U.S. National Economic Commission, said: "More than 50 countries have contacted the White House and started trade negotiations. President Trump has not tried to destroy the market by destroying the U.S. market."

Immediately afterwards, U.S. trade adviser Navarro spoke out: Trump seeks to cut tariffs and non-tariff barriers. This brother is a major supporter of tariff policies in Trump's camp, and he has recently been slamming Musk's free trade stance.

So, will there be any unexpected situations in this process?

It is also possible.

For example, the United States has not negotiated with the most important trade players, especially the European Union and China. At present, the two companies have either implemented countermeasures or threatened to implement countermeasures if negotiations fail (April 13). Treasury Secretary Bescent warned on the day of the announcement of the "reciprocal tariffs": Don't retaliate, otherwise the United States will increase its investment.

This situation may lead to negotiation stalemates and even short-term conflict escalation (further increasing tariffs from each other), but considering that most other countries will actively negotiate with the United States, the overall situation is unlikely to be worse than it is currently available.

After all, Trump's core task is to win more "political achievements" before next year's midterm election, rather than letting high inflation and collapsed stock markets ruin their second half of their term.

Therefore, it is more beneficial to Trump to "go crazy" earlier and negotiate earlier.

As the creator of "uncertainty", Trump also does not want to face "uncertainty" before next year's midterm elections.