University of Michigan economist Justin Wolfers humorously mocked a new "breakthrough" from President Donald Trump's administration on the potential deal with China on the ongoing trade war. As it turns out, the deal is to go back to the way things were before Trump jacked up the tariffs, he explained.
Speaking to MSNBC's Nicolle Wallace on Wednesday, "what they're saying and what the reality is, is totally different. Nicolle, it's a very funny world."
He explained that he loves teaching economics, but most of the time, when he's on her show, all he has to do is "read the newspaper and tell the truth out loud."
"So what happened was [Secretary of Commerce] Howard Lutnick went to London. Funny place to go to, London, because it was the last place he failed to negotiate a trade agreement," Wolfers cracked. "[He] met with the Chinese after we already have a deal in place with the Chinese. One that they'd struck in Geneva. And at the end of that, he announced that they had agreed — he and the Chinese — that they would each go back to their bosses to get sign off, that we would now agree that the old agreement was still the new agreement."
He sarcastically called it, "the enormous breakthrough" from the Trump administration.
"That old agreement that we now agree is our agreement, that old agreement was not, in fact, an agreement, but it was a pause on tariffs for 90 days," Wolfers said. "We've seen that trick before, combined with a framework for future talks that might lead to an agreement. Nicolle, my parents got divorced many years ago. I'm used to this sort of lawyer speak. It doesn't bring back good memories."
The important thing, he said, is that it's a "stop, start, on, off, here we go, merry-go-round" of tariffs. Meanwhile, Americans will "pay the costs of tariffs. The costs are that businesses can't get the inputs they want. ... Right now, there's no reason for anyone to believe any tariff announcement is going to last more than a week and a half. So, that means we're getting all the costs of tariffs and none of the benefits."
Wallace called Trump a kind of "psychological specimen," who is leaving Americans' heads "spinning." She asked how that bakes with the financial markets.
Wolfers said the result has been diminished expectations and hopes. Trump promised "90 deals in 90 days," and thus far, they have nothing more than a framework for one country.
Trump "thought he was going to get a better deal with China than anything we'd had under [Joe] Biden. That was the ambition. Then he put the fentanyl tariffs on, and some other China-specific tariffs, and that then led to an escalation. There was retaliation, counter-retaliation, and up and up and up we went."
During negotiations in Geneva, the United States sought to roll back to the status quo as of April 1, before Trump's retaliation. Talks in London began with the goal of walking things back to where they were on May 12.
"No one's talking anymore about getting things good. They're talking about — even the Trump administration — they're talking about a set of trading conditions with China that are less bad than the Trump administration had gotten us to just a few weeks ago," said Wolfers.
See the clip below or at the link here.