Is A Weary Trump Giving In On Tariffs?
Trump admits the US lacks skilled workers as immigration remains tight; easing tariffs on India, China, Switzerland signals cooling trade tensions.
The Gist
US President Donald Trump acknowledged a shortage of skilled labour in the country while discussing immigration policies.
- Trump emphasised the need for talent and criticised the current immigration stance.
- Nalin Haley, son of Nikki Haley, expressed frustration over job scarcity for young Americans.
- Negotiations with India and Switzerland are ongoing to lower tariffs and improve trade relations.
On Tuesday, US President Donald Trump admitted in a media interview that the United States does not have enough skilled talent to meet its labour needs.
You also have to bring in talent, he said.
A quick reminder, the US Government is presently focused on keeping all kinds of labour out of the country, whether skilled or unskilled, legal and illegal.
“You don’t have certain talents. And you have to, people have to learn. You can’t take people off, like an unemployment line, and say, ‘I’m going to put you into a factory. We’re going to make missiles,’” he told Fox News.
Elsewhere, Nalin Haley, the 24-year-old son of former US ambassador to the United Nations Nikki Haley, told a British news outlet the job market has become increasingly difficult for young Americans.
“We don't just stop illegal immigration,” said Haley, who has Indian roots. “I think we need to stop legal immigration,” he said.
His, fairly valid point - his friends have struggled to find work despite their education.
“My friend group from high school, all graduated, great degrees from great schools. It's been a year and a half, and not one of them has a job, not one. So I'm angry at that.”
Moreover, he says when you see a bunch of foreigners coming over here to take jobs that [my friends] wanted,” he said, “they have every right to be pissed, and I'm pissed for them.”
Looking back at the wild ride that began on April 2, the day Donald Trump announced the first reciprocal tariff announcements, you can see that some of the reasons that were proffered even make sense. For example, the need to bring jobs back to America from the countries they have fled to, notably China.
The strategy may not have failed but it has not worked. And even if it is or will over time, it will not instantly address the angst the young Mr Haley and his friends seem to be suffering from.
Elsewhere, in the case of both India and Switzerland, Trump has put out conciliatory statements.
In the case of India, he said that with India now substantially reducing Russian oil imports (which India has not as of October at least), the US would be bringing the tariffs down.
"We’re making a deal with India. Much different than we had. Right now they don’t love me but they will love us again. We’re getting a fair deal. I think we’re pretty close to doing a deal that is good for everybody," the President said.
Meanwhile, the US and Switzerland too are close to signing a trade deal to lower tariffs of 39% that President Donald Trump slapped on the country in August, according to multiple reports. CNBC reported the president saying on Monday that White House officials were “working on a deal to get the tariffs a little lower.”
“I haven’t set any number, but we’re going to be working on something to help Switzerland. We hit Switzerland very hard. But we want Switzerland to remain successful,” he added, saying the country had been a “very good ally.”
The tariff on Swiss exports could be cut to 15%, matching the rate that was imposed on EU exports to the U.S., according to various media reports citing sources close to the talks. Bloomberg reported that a deal could be finalized within weeks.
And there was the China truce deal.
The U.S. halved fentanyl-linked tariffs on imports from China to 10% and extended for a year a truce that lowered the reciprocal tariff rate from 34% to 10%. In return, China’s Ministry of Commerce rolled back several export restrictions on critical minerals and rare earth materials to the U.S. on Monday. Those curbs, first imposed on Oct. 9, had targeted materials vital for military hardware, semiconductors, and other high-tech industries.
In each of these cases, while all countries involved have embarked on intense backchannel negotiations and kept up the pressure, China and India for sure have not conceded an inch on the front channel.
India has creditably kept up the pressure, pointedly and openly rebutting President Trump on issues linked to Pakistan and stood its public ground so far on Russian oil and agriculture imports.
If I was in Trump’s negotiating team, I would be exhausted and pretty worn down by now.
On the other hand, inflation is rising in the United States, despite all the efforts by the administration to dismiss it. And prices will rise further. In industries like apparel which operate on roughly 6-month order and export cycles, the real pressure will start now, for both exporters and importers.
Indian restaurants in New York have already hiked prices because of the higher tariffs they pay on produce imported from India as a Bloomberg report pointed out earlier this week.
So will the US administration give in and bring tariffs back to some reasonable level in the next month? All signals are pointing in that direction.
Pressure has been building up from all sides, like we just recounted.
This would include corporations in America, which must include the likes of Walmart, Amazon and the auto industries, the exporting countries like China and India who are either doing their arm twisting or holding their ground.
And finally and hopefully, the realisation that the tariff strategy is not really working and not quite achieving the objectives it was supposed to or even moving in that direction.
And then the drubbing the Republicans have got in the spate of elections with Republicans having been banished from New York.
As elections go, a New York mayoral contest may be very small. As symbolism goes, it is right on the top.
And a democratic socialist mayor, many of whose economic policies would cause me to cringe too suggests whatever the Government is doing, it is not making the youth happier.
So, while Zohran Mamdani is a tipping point of sorts, will tariffs disappear and go back to the good old days ? Not likely at all and not soon.
But a healthy balance or number, at around 15% will surely restore some sanity across the board and maybe even improve Republicans’ electoral prospects.
And businesses all over the world who in any case are fighting a mighty battle to free themselves from America’s economic vice-like grip, might slow down.
The world of trade will not be the same, for a long time.
