I was originally going to hold off on this for a couple more days, but since the new inflation numbers are already being used as proof that the economic fallout from tariffs was overblown, let’s talk about what’s actually happening.
Yes, the April CPI report showed a slight dip in inflation. The number came in at 2.3 percent for the past 12 months, just under the expected 2.4 percent. That’s good news in isolation, but it doesn’t mean the full impact of the trade war has passed. These tariffs were massive, and the economic shock they caused doesn’t show up overnight. Disruptions take time to move through supply chains. Inventory gets reordered at higher costs, contracts get renegotiated, shipping lanes adjust. Those pressures are still building.
If we’re being consistent, we also have to ask this: if a 0.1 percent beat on inflation is enough to declare victory, then does Biden get the credit? Because this number covers the last year, and most of that policy landscape was his. Or do we only hand out wins when it fits the narrative?
The U.S. and China did agree to a 90 day pause on escalating tariffs. As part of that truce, the U.S. rolled back some tariffs on specific categories of Chinese goods, lowering them from as high as 145 percent to around 30 percent. China, in turn, reduced its tariffs on select U.S. goods from 125 percent to 10 percent. This is not a comprehensive trade agreement. It’s a temporary deescalation, meant to calm markets and buy time for negotiations. No structural reforms. No long term strategy. Just a tactical pause under economic pressure.
This is being framed as strategic decoupling, but what it really looks like is a forced walk back. China didn’t cave. Their exports kept climbing, and they used targeted retaliations like rare earth restrictions to send a message. Meanwhile, our markets took a hit, businesses got squeezed, and the administration blinked. This isn’t a long term win. It’s a sign the U.S. economy wasn’t in a position to absorb this level of disruption without serious consequences.
And even with the rollback, a 30 percent tariff is still massive. That’s not some manageable fee tucked into the margins. It’s a huge cost that filters into everything from electronics to machinery to household goods. The real hit comes when businesses start restocking at new prices, not old inventory. So even if inflation feels calm today, the cost of this policy is still working its way down the line. That’s not a political prediction. That’s just how supply chains work.
About that 258 billion dollar surplus. April always shows a surplus. It’s tax season. Receipts surge as businesses and individuals file. That’s happened under every president. Tariffs may add some revenue, but they’re also a tax on consumers and businesses here. If we’re calling that a win, let’s at least be honest about what actually caused it.
We were told tariffs would pay down the deficit. We were told China would fold. Now the story is shifting again. Every time the goalposts move, we’re expected to forget the last promise.
And this fits the broader trend we’ve seen with Trump. Create a problem, fix the problem you made, then declare victory. The way this policy is built isn’t about long term resilience. It’s about chaos first, credit later.
Also, let’s cool the jets on the stock market. A quick rebound isn’t a policy endorsement. Markets chase headlines, not strategy. They’re not exactly known for long term judgment, and they’re definitely not a stand-in for a stable economy.
The new tax bill, officially titled the One Big Beautiful Bill, includes a projected 4.9 trillion dollar increase to the deficit over the next decade. That’s tough to reconcile with Trump’s promise to eliminate the deficit using tariff revenue. That was the pitch. Tariffs would fund everything. But now we’re scaling those back, and at the same time pushing a tax plan that explodes the deficit? If we’re not collecting the tariffs, how exactly do the numbers work? Haha.