Trump administration floats major tariff rollback in talks with China... The Trump administration is considering a significant reduction in tariffs on Chinese imports during high-level talks in Geneva this weekend, aiming to ease growing economic pain and reset the tone of U.S./China trade relations, Bloomberg reports.
The U.S. delegation, led by Treasury Secretary Scott Bessent, has set a target to reduce current tariffs — some as high as 145% — to below 60%. Multiple officials told Bloomberg that such a move, if mirrored by Beijing, could take effect as soon as next week. Still, officials emphasized that the talks are exploratory and could mark the beginning of a prolonged negotiation process, not a resolution. The U.S. is also pressing for an end to China’s export controls on rare earth elements, critical for manufacturing defense and tech products, and discussions on restricting exports of fentanyl precursor chemicals may follow.
National Economic Council Director Kevin Hassett on CNBC this morning described the preparations as “very promising, highlighting a sense of momentum as both sides prepare for high-level discussions aimed at de-escalating a prolonged and damaging trade conflict.
However, White House spokesperson Kush Desai downplayed specific policy targets, stating: “Any discussion about ‘target’ tariff rates is baseless speculation.”
India offers steep tariff cut, other concessions to secure U.S. trade deal... India is analyzing a U.S. request to ease restrictions around the purchase of genetically modified crops as part of ongoing trade negotiations between the two countries, people aware of the matter told Bloomberg. India has offered to slash its tariff gap with the U.S. to less than 4% from nearly 13% now, in exchange for an exemption from President Donald Trump’s “current and potential” tariff hikes, sources with knowledge of the situation told Reuters.
The proposal marks one of the most dramatic moves to reduce trade barriers in India’s recent economic history. If accepted, the average tariff differential — calculated across all products without weighting for trade volume — would drop by nine percentage points. “Preferential market access for India would mean better terms of trade for these goods compared to America’s other trading partners,” said one senior Indian official.
India’s offer: Deep concessions across sectors. According to Reuters sources, India has proposed cutting tariffs to zero on 60% of tariff lines in phase one of the deal. The country is offering preferential access to nearly 90% of goods imported from the U.S. New Delhi is also asking for tariff exemptions and market access for key Indian exports, including:
- Gems & jewelry
- Leather & apparel
- Textiles
- Plastics & chemicals
- Shrimp, bananas, grapes, and oilseeds
In return, India is offering to ease export regulations on high-value U.S. goods like:
- Aircraft and auto parts
- Luxury and electric vehicles
- Medical devices, telecoms gear, hydrocarbons
- Alcoholic beverages and select fruits
- Animal feed and industrial chemicals
India also wants to be treated on par with key U.S. allies like the UK, Australia and Japan in sensitive tech sectors, such as AI, semiconductors, telecom, biotech and pharmaceuticals. A team of Indian negotiators is expected to travel to the U.S. later this month to advance the deal.
Lutnick: Asian trade deals will lag UK pact... Commerce Secretary Howard Lutnick said Thursday that trade agreements with Japan and South Korea will take substantially more time than the newly announced U.S./UK framework deal. While President Donald Trump touted the UK agreement as a model for future trade pacts, Lutnick emphasized the complexity of other negotiations. Still, Lutnick expressed optimism the UK deal could serve as a template for other regions. Lutnick reaffirmed that Trump’s 10% baseline tariff remains the “bottom line,” but warned that countries would face even higher tariffs unless they significantly opened their markets.
Politico: $60 billion farm bill package eyed for reconciliation... House Republicans are preparing a $60 billion agriculture reconciliation package that would deliver a major infusion of funding for farm programs — while shifting billions in food aid costs to states, according to Politico. The proposed framework includes: $50 billion to raise reference prices, a top priority for commodity groups seeking better safety net support in the face of rising production costs. There would also be additional funding for crop insurance, dairy and livestock programs, export market promotion (e.g., Market Access Program and Foreign Market Development Program) and “orphan programs” that were left out of prior farm bill iterations.
Following is the estimated breakdown of the proposed $60 billion farm bill reconciliation package:
- Reference Price Support: $50 billion (83.3%)
- Crop Insurance: $3 billion (5.0%)
- Dairy Programs: $2 billion (3.3%)
- Livestock Programs: $2 billion (3.3%)
- Export Trade Promotion: $2 billion (3.3%)
- Orphan Programs: $1 billion (1.7%)
Some of the above items other than higher reference prices and crop insurance changes may run up against opposition relative to the Byrd rule – a Senate rule that restricts what can be included in budget reconciliation bills, ensuring these bills remain focused on fiscal issues and do not become vehicles for unrelated policy changes. Specifically, the Byrd Rule prohibits “extraneous” provisions-those that do not produce a change in outlays or revenues, have only an incidental budgetary impact, increase the federal deficit beyond the budget window (usually ten years) or make changes to Social Security. If a senator believes a provision violates the Byrd Rule, they can raise a point of order; if sustained, the provision is removed from the bill unless 60 senators vote to waive the rule. The rule only applies in the Senate, but it often influences what the House includes in reconciliation bills to avoid having provisions struck later.
To fund the package, Republicans are proposing a shift in Supplemental Nutrition Assistance Program (SNAP) costs to state governments, a controversial move that is expected to spark strong Democratic opposition and legal scrutiny. The federal share of SNAP currently covers most of the program’s cost nationally.
This plan comes as the House Ag Committee prepares for a May 13 markup of its farm bill provisions. Speaker Mike Johnson (R-La.) is under pressure to deliver both tax cuts and rural support in the broader GOP reconciliation bill without exploding the deficit. Shifting SNAP costs gives the GOP fiscal room to fund politically popular farm support while claiming overall budget restraint.
Democrats are expected to fiercely oppose the SNAP shift, with some farm-state Democrats warning that a partisan farm bill risks unraveling longstanding coalitions that back agriculture policy. But Republicans point out that the Democrats previously successfully pushed a piecemeal farm bill which significantly raise conservation and food stamp funding.
The proposal signals that House Republicans are prioritizing ag baseline expansion in advance of the 2028 Farm Bill, even as food aid programs face heightened scrutiny.
Fed’s Barr warns Trump tariffs risk higher inflation and job losses... Federal Reserve Governor Michael Barr issued a stark warning Friday about the economic risks posed by President Donald Trump’s sweeping tariffs, cautioning that the levies could ignite persistent inflation while simultaneously slowing growth and raising unemployment. “The size and scope of the recent tariff increases are without modern precedent,” Barr said in remarks prepared for delivery at a conference in Reykjavik, Iceland. “I expect tariffs to lead to higher inflation in the United States and lower growth both in the United States and abroad starting later this year.”
Barr, who stepped down earlier this year as the Fed’s regulatory chief under political pressure, emphasized that policymakers could afford to be patient for now. “The U.S. economy is in a good place,” he said, citing robust labor market data and a solid current inflation backdrop. Still, he flagged a troubling divergence: while recent data shows stability, forward-looking indicators — so-called “soft data” — are flashing warning signs. “In my view, higher tariffs could lead to disruption to global supply chains and create persistent upward pressure on inflation,” Barr said. “I am equally concerned that tariffs will lead to higher unemployment as the economy slows.”
If both risks materialize, the Federal Open Market Committee (FOMC) could be forced into an uncomfortable bind, trying to address inflation without crushing employment. “The FOMC may be in a difficult position if we were to see both rising inflation and rising unemployment,” Barr said.
Barr noted it is too soon to assess the full fallout from the tariffs, whose final form remains unclear.