Following his meeting with Chinese President Xi Jinping over the weekend, President Trump said on Twitter that China had “agreed to reduce and remove tariffs on cars coming into China from the U.S.” — which currently sit at 40 percent. He also claimed that China had agreed to purchase more American farm products the following morning.

He told reporters on Air Force One on his way back to Washington that he and Xi had worked out “an incredible deal.”

Then, his administration began to walk back the president’s assertions.

On Monday evening, Bloomberg reported that Chinese officials would not formulate a response to Trump’s assertion until Xi got back to the country later this week. It also reported that Treasury Secretary Steven Mnuchin and top economic adviser Larry Kudlow “dialed back expectations and added qualifiers” to Trump’s claim that there was a deal on auto imports.


Kudlow told reporters on Monday, “I’ll call them ‘commitments’ at this point, which are — commitments are not necessarily a trade deal, but it’s stuff that they’re going to look at and presumably implement,” according to Bloomberg. “We don’t yet have a specific agreement on that,” he said. “But I will just tell you, as an involved participant, we expect those tariffs to go to zero.”

Mnuchin told reporters at the White House, “I think there is a specific understanding that we are now going to turn the agreement the two presidents had into a real agreement in the next 90 days. I’m taking President Xi at his word, at his commitment to President Trump. But they have to deliver on this.”

The White House also had to correct Kudlow on when the window to negotiate a final deal started (it started December 1, not January 1).

Trump’s top economic advisers couldn’t specify what China had agreed to do, and there was no joint statement from the United States and China following the meeting.

The White House statement from December 1 does not mention any agreement on auto tariffs or anything about Chinese tariffs at all, and is vague on Trump’s claim about farmers: “China has agreed to start purchasing agricultural product from our farmers immediately.”


On Tuesday, Trump walked back his assertion of a deal with China. He issued a series of tweets in which he said Kudlow, Mnuchin, Commerce Secretary Wilbur Ross, and trade adviser Peter Navarro would work with Trade Representative Bob Lighthizer to see “whether or not a REAL deal with China is actually possible.” He said it “probably will” but if it didn’t, “remember, I am a Tariff Man.” He concluded with a spinoff campaign slogan, “MAKE AMERICA RICH AGAIN.”

The negotiations with China have already started. Unless extended, they will end 90 days from the date of our wonderful and very warm dinner with President Xi in Argentina. Bob Lighthizer will be working closely with Steve Mnuchin, Larry Kudlow, Wilbur Ross and Peter Navarro….. — Donald J. Trump (@realDonaldTrump) December 4, 2018

……on seeing whether or not a REAL deal with China is actually possible. If it is, we will get it done. China is supposed to start buying Agricultural product and more immediately. President Xi and I want this deal to happen, and it probably will. But if not remember,…… — Donald J. Trump (@realDonaldTrump) December 4, 2018

….I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power. We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN — Donald J. Trump (@realDonaldTrump) December 4, 2018

This reflects a broader misunderstanding the president has displayed on how tariffs work. First, most American automobiles sold in China are built in China already, so the impact of any deal will be small.

His use of tariffs to get his way on the world economic stage often has detrimental impacts on American industries.

For instance, tariffs on imported steel and aluminium might benefit the domestic steel and aluminium industry so that they can hire a few more workers. But this comes with a cost — for every job created in this fashion, 16 other jobs are lost in the rest of the U.S. economy.


Companies like GM, Ford, and Harley Davidson find it much harder to manufacture their products in the United States, and they have to move production overseas where they can get cheaper materials. GM’s Lordstown plant in Ohio announced it would close last week, one year after Trump promised that the jobs would stay in his booming economy.