President Donald Trump’s deal to dramatically slash tariffs on China thrilled markets and offered a sliver of relief for businesses across the country. It also revealed an important lesson: Even Teflon Don can’t outrun economic reality.
The deal brokered in Geneva, in which both sides agreed to lower tariff rates by triple-digit percentages, came as anxiety mounted about a potential downturn in the U.S. The manufacturing sector, watching order books dry up, has been shrinking its workforce. Ports are warning of a plunge in shipments. Economists have been calculating significant odds of a recession.
Against that backdrop, the U.S. and China agreed to pull back from the brink of a bruising tariff fight that amounted to an all-out trade embargo between the world’s two largest economies, even as Beijing offered no commitment yet to change its trading practices.