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**APRIL 23, 2025**
I've said this time and time again, but it bears repeating. Unlike many news outlets, we don't have a billionaire benefactor bankrolling our work. We don't run glossy ads
in our magazine from high-paying corporate advertisers. Our ability to publish without interference, and with the boldness required for these dangerous times, depends on readers like you. We're committed to publishing uncompromising journalism to guide you through the chaos and give you the clear-eyed reporting that you depend on to take action.
I know economic uncertainty might make this a difficult time to donate. But your support, no matter how small, helps our reporters continue investigating the roots of this economic turmoil and the path forward.
If you value journalism that cuts through the noise to deliver clarity and context in these uncertain times, can you chip in to support our work today? [link removed]
-David Dayen, Executive Editor
Kuttner on TAP
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**** Trump Blinks
The president has backed off his latest threats to fire Fed Chair Jay Powell and is
now talking of a grand bargain with China.
On Monday, I wrote about Treasury Secretary Scott Bessent's role as the sole grown-up in the room [link removed]. Bessent has repeatedly talked Trump of the ledge, first to persuade him to suspend "Liberation Day" global tariffs, next to back off the gross weaponization of the IRS, and then to stop threatening to fire Fed Chair Jay Powell. Anxious financial markets saw Bessent as an oasis of sanity and rallied accordingly.
But on Monday, banging out a post on Truth Social [link removed], Trump doubled down on his crude attacks on Powell, calling him "Mr. Too Late, a major loser." Markets then plummeted more than 2.7 percent.
Now, however, the plot thickens again. On Tuesday, the Dow rose almost 1,000 points on comments by Bessent at a conference sponsored by JPMorganChase that a deal with China might be in
the offing. "No one thinks the current status quo is sustainable [link removed]," Bessent told the gathering.
Markets assumed that this was a deliberate leak of another pending policy reversal. And it was.
Later yesterday, a kinder and gentler Trump emerged, almost as if he had switched his meds. Speaking to reporters in the Oval Office [link removed], Trump said that tariffs on goods from China will "come down substantially," adding that "we're going to be very nice and they're going to be very nice, and we'll see what happens."
On the subject of the Fed chair, Trump said that he had no intention of firing Powell: "Never did," Trump told reporters. "The press runs away with things. No, I have no intention of firing him." Silly press, reporting what Trump says.
The Wall
Street Journal quotes a senior White House official [link removed] saying that China tariffs would go down between 50 and 65 percent and could be phased in over five years.
It's not clear whether the China policy had already changed when Bessent spoke to the JPMorganChase meeting, or whether Trump followed Bessent's lead. What is clear is that market anxiety gives Bessent special powers as the Trump whisperer. At this writing, the Dow is way up again.
[link removed]
Meanwhile, the China grand bargain remains in the realm of wishful thinking. Trump and Chinese President Xi still have not spoken, and the Chinese are now bragging that Trump blinked first-which indeed he did.
"Trump chickened out [link removed]" was the
top trending topic on China's Weibo social media website on Wednesday, with more than 150 million views. In bargaining terms, Trump's ploy ended up strengthening Xi's hand.
Trump blinked first because his tariffs were doing far more damage to the U.S. economy than to China. Tariffs of 145 percent are the equivalent of a total boycott. A wide range of consumer and producer goods reliant on Chinese supply were abruptly shut down. And China's retaliatory tariffs were on the verge of devastating American agriculture.
The largest U.S. export to China is soybeans [link removed], which totaled 27 million metric tons last year, valued at $12.8 billion, or about 9 percent of all U.S. exports to China. That equals more than half of all U.S. soybean exports.
In the next few days, we are likely to see some kind of handshake deal in which China agrees to buy more stuff from the U.S., Trump cuts the super-tariff on China, and
a joint task force is announced to address structural issues. The problem is China's entire mercantilist system, whose revision does not lend itself to a quickie grand bargain.
Even with a less mercurial president, China is far better positioned to play the long game than the U.S. China's time horizon is centuries if not millennia. Trump's attention span is in days or hours.
Once again, we are likely to see Trump declaring victory by ending a crisis created by reckless, self-defeating policies that he never should have imposed in the first place. This will lead to no substantive progress on the real issues dividing China and the U.S.
Was there some method in Trump's madness? Nope, it was just plain madness, a series of tantrums pretending to be a policy.
~ ROBERT KUTTNER
Follow Robert Kuttner on Twitter [link removed]
On the Prospect website
The Trump Administration Is Objectively Pro-Cancer
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America used to have the best medical research system in the world. Elon Musk and RFK Jr. are ripping it to shreds. BY RYAN COOPER
The GOP Is Destroying Justice to Embolden Trump's Lawlessness [link removed]
Attacks on judges from Republican members of Congress represent the subjugation of two branches of government under the president. BY XAVER CLARKE
Francis and His Critics [link removed]
To the American and Catholic right wing, the Pope's Christian humanism was all but heretical. BY HAROLD MEYERSON
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