President Trump’s remarks this week signaled a potential de‑escalation in the U.S.–China tariff standoff as he expressed reluctance to push duties higher amid mounting signs of weakening consumer demand and volatile markets citeturn2news9. Recent data show U.S. consumer sentiment has fallen to multiyear lows and predicted retail spending growth is cooling, underscoring the risk of over‑taxation on importers and end users
At the same time, China has publicly indicated it will refrain from tit‑for‑tat increases and allied nations such as South Korea are pressing Washington to delay new levies, creating a narrow window for fresh talks. Meanwhile, the high‑profile divestiture of TikTok’s U.S. arm has been placed on hold, transforming the app’s fate into a diplomatic bargaining chip as global tech firms jockey for a coveted U.S. footprint
Consumer Drag Pressures U.S. Spending
President Trump warned that escalating tariffs beyond current levels risked suppressing consumer purchases, noting that excessive duties could discourage Americans from buying imported goods. His concern reflects a broader apprehension that higher prices at the retail level will prompt households to pull back on discretionary spending, weighing on economic growth.
The University of Michigan’s Consumer Sentiment Index plunged to 50.8 in April, its lowest since June 2022, illustrating a pervasive slump in confidence across demographics. With sentiment faltering, economists expect consumer outlays to cool sharply in the coming quarters, heightening the stakes for policymakers balancing protectionism against growth.
Equity and currency markets reacted violently to the April 2 tariff announcement, with the S&P 500 tumbling more than 2% immediately after the news and the dollar weakening against major peers. The volatility reflected investors’ fears of a deepening trade war, pushing the VIX index to levels unseen in over a year.
Although some volatility has since receded, major tech names and industrials remain under pressure as firms grapple with potential input‑cost shocks and disrupted supply chains. Market analysts warn that until trade policy clarity returns, sentiment is likely to stay fragile and could fuel further swings.
Parallel Reluctance in Beijing
China’s government announced it “will not respond” to further tit‑for‑tat tariff hikes, signaling a shared interest in stepping back from the brink of a full‑blown trade war. That statement marked a departure from earlier retaliatory rhetoric, suggesting Beijing may be open to negotiation rather than escalation.
Earlier, Chinese Foreign Ministry spokesperson Lin Jian denounced U.S. duties as “typical protectionism and economic bullying,” urging other countries to resist unilateral measures. This anti‑bullying campaign aims to rally the Global South against perceived Western overreach in trade policy.
South Korea has publicly urged the United States to delay new tariffs, warning that steep levies could undermine export‑oriented industries critical to its economy. Seoul’s finance minister emphasized cooperation in shipbuilding and energy while seeking to protect its export performance during negotiations.
Acting South Korean President Han Duck‑soo echoed those concerns, calling for immediate talks with U.S. officials to shield domestic businesses from looming duties. The pressure from a key U.S. ally highlights how American protectionism can ricochet through allied supply chains and financial markets.
Beijing’s Global Pushback
At international forums, China has framed U.S. tariffs as assaults on the rules‑based order, portraying them as “bullying” tactics that threaten global economic stability. Foreign Minister Wang Yi is set to convene an informal UN Security Council meeting on April 23 to criticize these measures directly.
By appealing to developing nations in Africa, Southeast Asia, and Latin America, Beijing seeks to build a coalition against unilateral Western trade barriers. This diplomatic offensive underscores how trade disputes have evolved into broader geopolitical battles for influence.
A Narrow Window for Talks
By pausing further tariff increases, both Washington and Beijing have carved out space for negotiations, though substantive high‑level exchanges have yet to materialize. Administration insiders note that while lower‑level channels remain open, direct talks between Presidents Trump and Xi Jinping are not currently on the agenda.
Still, the mutual restraint from both sides may signal a willingness to explore a comprehensive package that addresses structural trade imbalances and market access concerns. Economists caution that without clear frameworks, any deal risks being piecemeal and temporary.
TikTok Deadline as a Negotiation Lever
President Trump has repeatedly extended the deadline for ByteDance to divest TikTok’s U.S. operations, leveraging the looming sell‑off date as a tool to extract broader trade concessions. Each extension underscores how regulatory timelines can be weaponized in diplomatic bargaining.
On April 4, Trump granted a 75‑day reprieve, citing “tremendous progress” but deferring final action until negotiations advance. This approach keeps ByteDance off‑balance while maintaining pressure on Beijing to compromise on tariffs.
Negotiators are considering a structure that would spin off TikTok’s U.S. arm into a new company with less than 20% Chinese ownership, satisfying legal requirements while minimizing operational disruption. That model aims to balance U.S. security interests with the platform’s economic value.
Sources indicate that major non‑Chinese investors would increase their stakes, creating a U.S. majority‑owned entity capable of maintaining the app’s service continuity and data safeguards. Careful corporate design will be critical to satisfying both regulators and potential buyers.
TikTok’s perceived data‑security risks have attracted rare bipartisan support in Congress, giving the administration political cover to treat the app’s divestiture as integral to China policy. Legislators on both sides worry about foreign‑controlled platforms accessing sensitive user information.
A bipartisan bill introduced last year set firm deadlines for ByteDance to sell or face a U.S. ban, reflecting shared anxiety over adversarial state influence. The security narrative bolsters executive authority to tie cultural‑tech disputes to high‑stakes trade negotiations.
Bidders Jockey for U.S. Assets
U.S. tech giants and private equity groups, including Amazon and a consortium led by OnlyFans founder Tim Stokely, have publicly expressed interest in acquiring TikTok’s American business. Their bids offer a snapshot of the platform’s lucrative ad revenue potential.
Meanwhile, Oracle is widely viewed as a frontrunner for hosting TikTok’s data infrastructure under proposed carve‑out plans, further intensifying competition among Silicon Valley players. The auction dynamics will shape the valuation and strategic fit of TikTok’s U.S. operations.
Delaying the TikTok deal until after trade talks serves as a clear message to Beijing that non‑economic issues can be folded into broader negotiations. By linking a popular social app’s fate to trade outcomes, the U.S. underscores its leverage points.
China’s objection to the spin‑off plan immediately after new U.S. levies illustrates how economic and cultural disputes have merged into a single diplomatic front. Both sides now treat tech policy as a critical lever in the larger relationship.
Strategic Patience Keeps Options Open
By keeping the TikTok resolution “on ice,” the U.S. retains flexibility to adjust concessions or ramp up pressure depending on the arc of tariff discussions. This calibrated patience protects American interests without prematurely surrendering negotiating capital.
President Trump has even floated the idea of trimming tariff rates to clinch a TikTok divestiture, signaling readiness to trade concessions for regulatory victories. The unfolding chess match suggests both sides are weighing short‑term gains against long‑term strategic influence.
With consumer confidence waning, markets jittery, and global allies pressing for relief, the administration’s recalibration of trade tactics marks a pivotal moment in U.S.–China relations. As the fate of TikTok hangs in the balance, its divestiture process will serve as both a pressure point and a barometer of broader diplomatic engagement.
(Source:www.economictimes.com)
At the same time, China has publicly indicated it will refrain from tit‑for‑tat increases and allied nations such as South Korea are pressing Washington to delay new levies, creating a narrow window for fresh talks. Meanwhile, the high‑profile divestiture of TikTok’s U.S. arm has been placed on hold, transforming the app’s fate into a diplomatic bargaining chip as global tech firms jockey for a coveted U.S. footprint
Consumer Drag Pressures U.S. Spending
President Trump warned that escalating tariffs beyond current levels risked suppressing consumer purchases, noting that excessive duties could discourage Americans from buying imported goods. His concern reflects a broader apprehension that higher prices at the retail level will prompt households to pull back on discretionary spending, weighing on economic growth.
The University of Michigan’s Consumer Sentiment Index plunged to 50.8 in April, its lowest since June 2022, illustrating a pervasive slump in confidence across demographics. With sentiment faltering, economists expect consumer outlays to cool sharply in the coming quarters, heightening the stakes for policymakers balancing protectionism against growth.
Equity and currency markets reacted violently to the April 2 tariff announcement, with the S&P 500 tumbling more than 2% immediately after the news and the dollar weakening against major peers. The volatility reflected investors’ fears of a deepening trade war, pushing the VIX index to levels unseen in over a year.
Although some volatility has since receded, major tech names and industrials remain under pressure as firms grapple with potential input‑cost shocks and disrupted supply chains. Market analysts warn that until trade policy clarity returns, sentiment is likely to stay fragile and could fuel further swings.
Parallel Reluctance in Beijing
China’s government announced it “will not respond” to further tit‑for‑tat tariff hikes, signaling a shared interest in stepping back from the brink of a full‑blown trade war. That statement marked a departure from earlier retaliatory rhetoric, suggesting Beijing may be open to negotiation rather than escalation.
Earlier, Chinese Foreign Ministry spokesperson Lin Jian denounced U.S. duties as “typical protectionism and economic bullying,” urging other countries to resist unilateral measures. This anti‑bullying campaign aims to rally the Global South against perceived Western overreach in trade policy.
South Korea has publicly urged the United States to delay new tariffs, warning that steep levies could undermine export‑oriented industries critical to its economy. Seoul’s finance minister emphasized cooperation in shipbuilding and energy while seeking to protect its export performance during negotiations.
Acting South Korean President Han Duck‑soo echoed those concerns, calling for immediate talks with U.S. officials to shield domestic businesses from looming duties. The pressure from a key U.S. ally highlights how American protectionism can ricochet through allied supply chains and financial markets.
Beijing’s Global Pushback
At international forums, China has framed U.S. tariffs as assaults on the rules‑based order, portraying them as “bullying” tactics that threaten global economic stability. Foreign Minister Wang Yi is set to convene an informal UN Security Council meeting on April 23 to criticize these measures directly.
By appealing to developing nations in Africa, Southeast Asia, and Latin America, Beijing seeks to build a coalition against unilateral Western trade barriers. This diplomatic offensive underscores how trade disputes have evolved into broader geopolitical battles for influence.
A Narrow Window for Talks
By pausing further tariff increases, both Washington and Beijing have carved out space for negotiations, though substantive high‑level exchanges have yet to materialize. Administration insiders note that while lower‑level channels remain open, direct talks between Presidents Trump and Xi Jinping are not currently on the agenda.
Still, the mutual restraint from both sides may signal a willingness to explore a comprehensive package that addresses structural trade imbalances and market access concerns. Economists caution that without clear frameworks, any deal risks being piecemeal and temporary.
TikTok Deadline as a Negotiation Lever
President Trump has repeatedly extended the deadline for ByteDance to divest TikTok’s U.S. operations, leveraging the looming sell‑off date as a tool to extract broader trade concessions. Each extension underscores how regulatory timelines can be weaponized in diplomatic bargaining.
On April 4, Trump granted a 75‑day reprieve, citing “tremendous progress” but deferring final action until negotiations advance. This approach keeps ByteDance off‑balance while maintaining pressure on Beijing to compromise on tariffs.
Negotiators are considering a structure that would spin off TikTok’s U.S. arm into a new company with less than 20% Chinese ownership, satisfying legal requirements while minimizing operational disruption. That model aims to balance U.S. security interests with the platform’s economic value.
Sources indicate that major non‑Chinese investors would increase their stakes, creating a U.S. majority‑owned entity capable of maintaining the app’s service continuity and data safeguards. Careful corporate design will be critical to satisfying both regulators and potential buyers.
TikTok’s perceived data‑security risks have attracted rare bipartisan support in Congress, giving the administration political cover to treat the app’s divestiture as integral to China policy. Legislators on both sides worry about foreign‑controlled platforms accessing sensitive user information.
A bipartisan bill introduced last year set firm deadlines for ByteDance to sell or face a U.S. ban, reflecting shared anxiety over adversarial state influence. The security narrative bolsters executive authority to tie cultural‑tech disputes to high‑stakes trade negotiations.
Bidders Jockey for U.S. Assets
U.S. tech giants and private equity groups, including Amazon and a consortium led by OnlyFans founder Tim Stokely, have publicly expressed interest in acquiring TikTok’s American business. Their bids offer a snapshot of the platform’s lucrative ad revenue potential.
Meanwhile, Oracle is widely viewed as a frontrunner for hosting TikTok’s data infrastructure under proposed carve‑out plans, further intensifying competition among Silicon Valley players. The auction dynamics will shape the valuation and strategic fit of TikTok’s U.S. operations.
Delaying the TikTok deal until after trade talks serves as a clear message to Beijing that non‑economic issues can be folded into broader negotiations. By linking a popular social app’s fate to trade outcomes, the U.S. underscores its leverage points.
China’s objection to the spin‑off plan immediately after new U.S. levies illustrates how economic and cultural disputes have merged into a single diplomatic front. Both sides now treat tech policy as a critical lever in the larger relationship.
Strategic Patience Keeps Options Open
By keeping the TikTok resolution “on ice,” the U.S. retains flexibility to adjust concessions or ramp up pressure depending on the arc of tariff discussions. This calibrated patience protects American interests without prematurely surrendering negotiating capital.
President Trump has even floated the idea of trimming tariff rates to clinch a TikTok divestiture, signaling readiness to trade concessions for regulatory victories. The unfolding chess match suggests both sides are weighing short‑term gains against long‑term strategic influence.
With consumer confidence waning, markets jittery, and global allies pressing for relief, the administration’s recalibration of trade tactics marks a pivotal moment in U.S.–China relations. As the fate of TikTok hangs in the balance, its divestiture process will serve as both a pressure point and a barometer of broader diplomatic engagement.
(Source:www.economictimes.com)
