Trump Tariffs: China Deadline Nears. Goldman Says Consumers Will Soon Feel More Pain.

President Donald Trump hasn’t said for sure what will happen if the deadline on another China deal passes. (Getty Images)

President Donald Trump is still working on a further trade deal with China as the 90-day period for reduced tariff rates comes to an end Tuesday.

There are few signs about what may happen if a further agreement isn’t reached, though the White House has indicated in the past that deadlines are less important than progress in any talks. Since U.S. and Chinese officials met in Stockholm in July, tariffs on most Chinese imports has been about 30%, down from 145% before that deal.

Investors appear to be expecting another extension–anything other than that could be a shock. The Nasdaq notched a record high on Friday, bolstered by the artificial intelligence boom, and high valuations could make the market vulnerable to a pullback.

In the meantime, Trump’s new tariff regime is having an effect on the economy. Strategists at Goldman Sachs led by Jan Hatzius said that U.S. consumers had only absorbed 22% of the tariff costs through June, but that their share would soon rise to 67% if recent tariffs follow the same pattern as earlier ones. U.S. businesses have absorbed more than half of the costs so far, but that share is set to drop to less than 10%, they said in a note published Sunday.

Finally, foreign exporters have absorbed 14% of the tariff costs so far but that could rise to 25%, they added.

Separately, semiconductor makers Nvidia and AMD have agreed to pay the U.S. government 15% of revenues from chip sales to China, The Wall Street Journal reported citing people familiar with the situation.

The arrangement shows how Trump is squeezing both ends of international trade when it comes to technology, using the threat of sky-high tariffs to get concessions from China on rare earth minerals and forcing companies to pay extra taxes in exchange for the right to sell goods to China.

Late Sunday, Trump posted on his Truth Social site that China is worried about a soybean shortage and suggested the country should increase its orders from U.S. producers.

Write to Brian Swint at brian.swint@barrons.com