America's Talking - Stocks Soar After Temporary Tariff Reduction Between U.S., China

Episode Date: May 17, 2025

(The Center Square) – U.S. stocks soared Monday after the world's two largest economies reached a temporary trade deal to significantly lower tariffs while talks continue. The Dow gained 2.8% to close at 42,410, above where it closed on April 2 before President Donald Trump's "Liberation Day" tariffs drove markets down. The S&P 500 gained 3.26% on the day while the Nasdaq was up 4.3%, entering a new bull market by closing 20% above its April low point. On Monday morning, China and the U.S. released details of a trade pact reached over the weekend after talks in Geneva. The U.S. and China said they will cut tariffs on imports from each other by May 14.Support this podcast: https://secure.anedot.com/franklin-news-foundation/ce052532-b1e4-41c4-945c-d7ce2f52c38a?source_code=xxxxxxFull story: https://www.thecentersquare.com/national/article_700f445f-e11a-4496-9456-402a50f0b243.html Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Hello and welcome to America in Focus, powered by the Center Square. I'm Dan McAulb, Chief Content Officer at Franklin News Foundation, publisher of the Center Square Newswire Service. After significant trade negotiations last weekend, the U.S. and China agreed this week to pause their tariff war, lowering tariffs across the board as the world's two largest economies look to reshape international trade, stocks stored on the news. Joining me to discuss this is K.C. Harper, Washington, D.C. Bureau Chief for the Center Quay, how sick significant could a permanent trade deal between the U.S. and China be?

Well, it's hard to overstate how significant it could be. I mean, I think the fate of the U.S., certainly the fate of the Chinese economy is in play, and even the U.S. economy is heavily impacted by this. We, you know, import an incredible amount of cheap goods from China and sell them in the U.S. There's a lot of businesses in the U.S., small businesses included that rely entirely on imports from, China and have already gone out of business or on the verge of going out of business because of tariffs. So there's a lot of very happy business people in light of this pause and this agreement. I think it's good for both China and the U.S. It's hopefully going to be a more targeted approach that hits on specific industries that we're looking on redeveloping instead of blanket tariffs over the whole globe. I mean, first off, you know, it was, you know, entire countries and whole parts of the world getting tariffed in China.

included. And now we're pairing that back and we can maybe do specific tariffs on certain industries. And so if Trump is really interested in rebuilding, you know, manufacturing base in the U.S., that's great. I think that makes a lot of sense. I think there's a real national security concern there. If we can't, if we don't have the manufacturing capacity as a nation to, you know, build enough vehicles and planes and bombs and guns and make enough of our own food and antibiotics and, you know, other prescription drugs, and I think that's a real national security issue. All of a sudden, we're going to war with China over Taiwan, and it turns out they make everything for us, we're going to be in trouble, right? We're going to have an issue. So there's a national

security thing, problem there. It makes sense to do this. But some of these tariffs are just, we're so broad that they were tariffing things that we don't even want to make in the U.S. or have the capacity to make in the U.S. or maybe we don't even have the right minerals or resources to make this in the U.S. So I'm hopeful that this new deal, can get it more narrowly targeted. Like we're going to go after auto industry. We're going to go after, you know, manufacturing of these certain goods and microchips and these things that are really important instead of a blanket tariff that causes a lot

of unnecessary economic pain. So on Liberation Day, as he called it, President Trump instituted a wide swath of tariffs not just on China, on European nations, Asian nations, etc. a week later after markets reacted negatively to that, he lifted all of the tariffs, he reduced all of the tariffs down to a 10% baseline except on China, which he kept at 145%. China and the U.S. are by far the world's two largest economies. So that had the potential to really negatively affect international trade across the world. But after last weekend's negotiations, they both brought their tariffs on each other down as they continue to talk on a much larger trade deal.

This could have seriously significant global implications and resetting trade across all countries. And that could be significant for everybody's economy, including the U.S.s. Yeah, I think so. And it's good that we're being proactive because global trade has been resetting for years now. without us in a sense. I mean, we've had different countries doing things and developing. We've had, you know, for instance, bricks. So we have these nations like, you know, Brazil and India and others getting together working on issues like oil and currency. And we have China investing in countries all over the world, you know, Africa and other countries investing in infrastructure,

you know, buying ports from other people. I mean, China's been very aggressively trying to via like kind of predatory investment and buying ports and everything's taking taking over a lot of these countries in the trade realm. And so there's been like a very slow realignment that's been happening year after year. And the U.S. is just sort of in watching it happen. And it's like we're waiting for the inevitable, which is the top superpower to fall because we think that's what happens in history, the empire always replaced by another. but but the president is doing something proactive to realign that now he he may inadvertently hasten

the economic um downfall of the u.s and by downfall i don't mean collapse i just mean us kind of moving to where there's a multipole to a multipolar world which is to say instead of the u.s being the one and only dominant economic force we might have you know two or three dominant economic forces that balance across the globe i don't know um but there's some kind of systemic issues in the U.S. economy that Trump is trying to address. We can't just rely on inflated tech company valuations to say our economy's good, just because some app is valued, you know, $50 billion. It doesn't mean it actually has, like, real economic value long term. It's not actually producing anything. It's not tied to any natural resources. It's not really employing that many people. And so you think about kind of like

what's under the hood of the economy. And do we have the manufacturing capacity? Are we, you know, investing in oil and gas, drilling. You know, Biden really discouraged that. And we're actually seeing lawsuits pop up all over the U.S. right now to discourage, you know, domestic oil and gas production. So, you know, there's things like that that, you know, that are, I think, indicators of more like the long-term health of the economy that have been troubling. And so getting under the hood the way Trump is and trying to realign things and keep up with the changes that are happening globally, it makes a lot of sense. Now the devil's in the details and whether he can execute that well. Some people are doubtful for, but he's trying, you know, and I guess we'll see how successful he is in this.

Thank you for joining us today, Casey. Listeners can keep up with this story and more at thecenter square.com.