What Happened: On Monday, Former Treasury Secretary Larry Summers shared highlights on his X account from his appearance on CNN’s “The Arena,” where he discussed the Trump administration’s move to back off from its “extremely punitive” tariff regime against China.
Summers highlighted a pattern he’s observed since “Liberation Day,” noting that “whenever the commitment to the Liberation Day policies increases, markets go down. Whenever there’s signs of backing off, markets go up.” He says, “Today was a day of backing off, and so markets went up.”
Don’t Miss:
Hasbro, MGM, and Skechers trust this AI marketing firm — become an investor at $0.60/share before it’s too late.
The team behind $6B+ in licensing deals is now building the next billion-dollar IP empire — invest early at $2.25/share.
He says it is “very clear” that it was President Donald Trump who “blinked,” since “China didn’t make any consequential or significant change in its policies.”
Today on @CNN @Kasie asked me what happened with the markets today? The market got a signal, probably a valid signal, that the Trump Administration was backing off its extremely punitive to the U.S. economy, tariff regime against China. We’ve seen a pretty clear pattern since…
— Lawrence H. Summers (@LHSummers) May 12, 2025
“Sometimes it’s good to blink,” Summers says, framing Trump’s reversal in a positive note. “When you make a mistake, it’s usually best to correct it and retreat, even if it’s a little bit embarrassing,” he says, while applauding Treasury Secretary Scott Bessent for his leadership during this period.
Speaking on the risks of a recession, Summers says that he is “encouraged” by the administration being less committed to its “disastrous policies,” as he had feared in the past. He now sees U.S. recession odds at “a little bit on the south side of 50/50.”
He says this is largely because “the Administration appears to be turning the wheel, rather than driving the vehicle over a cliff.”
Why It Matters: Stocks rallied following the tariff de-escalation with China on Monday, with the tech sector seeing big gains, as analyst Dan Ives calls it a “dream scenario” for tech investors.
Summers has been a vocal critic of the administration’s tariff policies, predicting an “Oil crisis-like shock,” and $30 trillion in potential economic losses.
He’s also rejected this narrative of China cheating at trade, saying that “if China wants to sell us things at really low prices,” such as solar collectors or cheap batteries for electric cars, “It’s kind of a good deal for us,” he said, adding that we only send them “pieces of paper that we print.”
See Next:
Deloitte’s fastest-growing software company partners with Amazon, Walmart & Target — Get 4,000 of its pre-IPO shares for just $0.30/share.
Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — become an investor for $0.80 per share today.
Photo Courtesy: Tomas Ragina On Shutterstock.com
Trump ‘Blinked’ On China Tariffs, Says Ex-Treasury Secretary Larry Summers — ‘Sometimes It’s Good To Blink,’ As Markets Breathe A Sigh of Relief originally appeared on Benzinga.com.
