While the White House is touting the “art of transaction,” one might say that the recent U.S.-China trade deal is a chapter of “the subtle art of flowing.”
Economist Peter Schiff recently released the Trump administration to blast the Trump administration for having no meaningful Chinese gains.
"How does this trade win for Trump?" he asked. "China has gained nothing. The 145% tariff we imposed has been reduced to 30%. The 125% tariff they imposed has been reduced to 10%. If the 145% tariff is just a bargaining chip, then China has already called Trump's Bruve and won the victory."
He continued to answer the comments: "So we agree to suspend the war we started what has won? We have not won a fight in this war."
Other economists responded to this view. "'Large tariffs' are designed to encourage retax and generate trillions of dollars in tax fundraising," international economist James Knightley wrote in a business insider's report to investors.
But, with tariffs reduced by 90 days, “in China, most production is cheaper than relocating it to the United States”
“I think it’s obvious that @realdonaldtrump blinked, economist and former Treasury Secretary Larry Summers wrote on X. “We say we are determined to impose these policies in uncertain times.” China has no consequences or major changes or has made any major changes in its policies. Sometimes you blink. It is usually corrected, if you correct this problem, it is corrected, and it is corrected, and it is corrected, and it is corrected, and it is corrected, and it is corrected, and it is corrected, and it is corrected, and it is corrected, and it is done.
The United States may not have gained much from the brief trade war, but due to its lingering impact, it will still lose some economic struggle in the coming months. This is why.
Despite recent trade agreements with China and the UK, U.S. consumers still face an overall average effective tariff rate of 17.8%, the highest since 1934, according to Yale University’s Budget Laboratory.
It estimates that in 2025, tariffs and foreign retaliation in the United States will increase real GDP by 0.7%, increasing unemployment by 0.35% by the end of the year, while price levels increase by 1.7% in the short term, equivalent to an average loss of purchasing power per household of $2,800 per household for $2,024.
According to the Wall Street Journal, Pantheon Macroeconomics American economist Samuel Tombs believes that tariffs may eventually increase by 1% of the core PCE price index, according to the Wall Street Journal. He believes this could force the Fed to keep interest rates higher, meaning mortgages and auto loans remain expensive for longer periods of time.
Given that the trade deal is only a 90-day pause, there are concerns that businesses are not yet able to make long-term investment decisions. In short, investors and consumers face an uncertain future and must take steps to protect themselves.
Read more: You may have paid too much for this 1 "must" fee - your monthly bill may be raised due to Trump's tariffs. Here's how to protect your wallet now in 2 minutes
During times of volatility and uncertainty, Schiff advocates gold as a safe haven. The price of one ounce of gold has risen 22% over the past six months and is currently trading at $3,189.
Gold exchange trade funds such as SPDR Gold Stocks (GLDs) can help you diversify your portfolio and provide a buffer for certain market volatility. There are other ways to own gold.
Another potential haven may be the fiscal inflation protection securities (TIP). Unlike typical U.S. Treasury bonds, these tools adjust principal based on inflation, which means your funds are invisible wasteful of purchasing power.
Tips are especially useful if you have low risk tolerance and are concerned about higher inflation.
As for consumers, the actual expenses for your family may be higher or lower, depending on where the tariffs are obtained from here. Adding security to your annual spending plan may be the best way to protect your family from this uncertainty.
This article provides information only and should not be construed as advice. It is without any warranty of any kind.