Is the Trump administration close to an agreement with China? The shock of the US-Japan agreement with a $550 billion investment—how will the EU and China respond?

1. Remarks at the "AI Summit" in Washington—Comprehensive Agreement with China Nears Final Stage

On the 23rd, standing on the stage at an artificial intelligence-related event held in the capital, Washington, U.S. President Donald Trump stated, "A comprehensive trade agreement with China is almost finalized," and further remarked, "For the remaining countries, we have the option of 'direct tariffs.'"InfoMoney

At the same time, he mentioned being in "serious negotiations" with the European Union (EU), indicating that if they promise to open their markets, lower tariffs would be applied. This showcases Trump's dual strategy of "carrot and stick" once again coming to the forefront.

2. Agreement with Japan Settled at "15% Line"—$550 Billion Investment Package

Meanwhile, the U.S.-Japan agreement announced on the same day significantly reduced Japan's automobile tariffs from 27.5% to 15%, and the broad additional tariffs that were scheduled to be implemented on August 1 were also kept at the same rate. In return, Japanese government-affiliated institutions prepared a total of $550 billion in investment for the U.S., including the purchase of 100 Boeing aircraft and a joint semiconductor project.Reuters

Immediately after the announcement, the Nikkei average hit a new high for the year, and automobile stocks surged across the board. The Dow Jones Industrial Average also rose from the opening, with the market strengthening its expectation that more "15% deals" would follow by August 1.

3. Will the EU Follow Suit?—Report from the Financial Times

According to a report from the Financial Times (FT), citing EU sources, the U.S. and EU are also nearing a broad agreement on "import tariffs on European goods capped at 15%." There is a proposal to mutually eliminate tariffs on certain items such as aircraft, spirits, and medical devices, and the EU is reportedly preparing a list of retaliatory tariffs of up to 30% (totaling €93 billion) in case negotiations break down.Reuters

4. China's Sentiment—"A Success Worth Avoiding War"

At a press conference in Beijing on the 18th, Minister of Commerce Wang Wentao stated, "The practical discussions in Europe were meaningful, and there is no need to return to a tariff war," expressing confidence in reaching a final agreement by August 12. Chinese media also commented that "the U.S. should fulfill its responsibilities as a superpower," while welcoming the continuation of negotiations.Reuters

However, it remains unclear "how much the current average U.S. tariff on China of 53.6% will decrease."

5. The Temperature on Social Media—Hashtags "#ChinaDeal" and "#TariffPower"

• Supporters (Within the U.S.)

  • "Tariffs are the biggest bargaining chip. The world has no choice but to concede at this point." (@ExitH2O)X (formerly Twitter)

  • "If #ChinaDeal is realized, U.S. agricultural products will sell rapidly!" (@OraclesOfDegen)X (formerly Twitter)

• Skeptics and Experts

  • "The legal details are unclear. Is it sustainable?" (@thelawgist)X (formerly Twitter)

  • On Stocktwits, voices of "headwinds for the U.S. auto industry" are spreading.Stocktwits

• Chinese Social Media (Weibo)

  • "Is the U.S. only going to lower it by 10% after all? It's a renegotiation with zero creativity." (User "吉祥王宝")Voice of America

Despite these pros and cons, the number of posts is estimated to exceed 3 million in 24 hours (X + Weibo estimate), indicating high interest.

6. Impact by Industry

7. Strategic Significance of the "15% Baseline"

The "tariff card" that began in the first Trump administration in 2018 was largely maintained under the previous administration but has reignited since 2023. The 15% presented this time is low as a "signal to start negotiations," but if no agreement is reached, it could jump to 30-50%—functioning as a "retractable intimidation." Trade partners are structured to gain market access in exchange for reorganizing supply chains (reducing dependence on China and investing in the U.S.).

8. The Lens of International Politics—Domestic Performance of the "Second Trump Era"

Domestically, with an eye on next year's midterm elections, there is a need to pursue both "job security" and "inflation control." At the 15% level, the surge in import prices is limited, while simultaneously appealing for the return of manufacturing is possible. It can be described as "pragmatic populism" aimed at appealing to the conservative Republican base and balancing the concerns of the non-partisan public about living costs.

9. Outlook—The "Two Deadlines" in August

• August 1: Additional tariffs on multiple countries, including the EU and Indonesia, are scheduled to automatically take effect.

• August 12: Deadline for the "final agreement" with China. If both countries cannot make concessions, scenarios such as the re-imposition of high tariffs and a 0.2% reduction in global trade volume have also been calculated.Wikipedia

10. Conclusion

This chain of deals can be said to be the culmination of the "transactional diplomacy" advocated by the Trump administration. Whether this series of actions signifies the "end of the tariff war" or a "short-term truce" will be tested at the final line in early August. In any case, the global economy will be forced to reposition under the "new norm of 15%."

Powered by Froala Editor