Opinion | Trump faces a strategic dilemma in trade deal negotiations

The more Trump pushes for quick wins, the more other nations see that they might benefit from resisting, even as the US economy feels the pinch

Reading Time:4 minutes

Published: 8:30pm, 13 May 2025

In a joint statement released on May 12, following negotiations in Geneva, the United States and China agreed to a 90-day pause on most of the additional tariffs imposed since the trade war reignited earlier this year. Essentially, the deal restores tariffs to their pre-April levels but maintains a baseline 10 per cent tariff.

While the Trump administration hails the agreement as a diplomatic success, a closer look reveals a strategic dilemma: the more the US pushes for a deal, the less likely China is to make significant concessions. Conversely, prolonging the stand-off could exacerbate the US’ economic troubles, ultimately encouraging other countries to wait for Washington to yield.

This paradox is at the heart of the Trump administration’s current predicament. US President Donald Trump’s eagerness to secure a deal, especially amid mounting economic challenges, signals to China and other trading partners that the US could eventually compromise.

However, a delay in negotiations risks deepening the domestic economic downturn, giving international counterparts even more reason to hold firm. As a result, the administration finds itself trapped between the need for a deal and the risk of appearing weak on the global stage.

One of the most pressing factors influencing Trump’s stance is the state of the US economy. This year first quarter gross domestic product contracted 0.3 per cent – the first quarter of negative growth since early 2022. The pre-deal tariffs caused a virtual freeze in bilateral trade with China, with US ports projected to experience large declines in cargo volume and major retailers warning of significant shortages of consumer goods.

As domestic pressures mount, the administration’s willingness to reduce tariffs appears less like a diplomatic triumph and more like a necessary retreat. This perception weakens Trump’s negotiating position, with China and other countries recognising that Washington could be pushed to make further concessions to stabilise its economy.

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.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The more Trump pushes for quick wins, the more other nations see that they might benefit from resisting, even as the US economy feels the pinch

The more Trump pushes for quick wins, the more other nations see that they might benefit from resisting, even as the US economy feels the pinch