U.S. Sen. Elizabeth Warren (D-MA) during a Senate Finance Committee hearing in the Dirksen Senate Office Building on April 8, 2025 in Washington, DC.
Kayla Bartkowski | Getty Images
President Donald Trump is “losing a self-inflicted trade war” with China, leaving the United States with a “weak hand” going into his meeting with Chinese President Xi Jinping, Senate Democrats said Wednesday in a new report on the effects of Trump’s wide-ranging tariffs.
“Trump’s trade wars have imposed significant costs” on U.S. consumers and businesses, “sold out American farmers,” and the president “has strengthened China’s hand while weakening America’s leverage,” the report says.
CNBC received the report by Democrats on the Senate Committee on Banking, Housing, and Urban Affairs a day before Trump is set to meet Xi in South Korea.
Trump is “putting America’s long-term prosperity and security at risk,” Sen. Elizabeth Warren of Massachusetts, the ranking Democrat on the committee, said in a statement to CNBC.
“Trump needs to change course on his trade war with China now and stop hurting American families, farmers, and businesses,” Warren said.
Warren’s comments came before Trump, speaking at the Asia Pacific Economic Forum in Gyoeongju, South Korea, said he was optimistic of reaching a trade deal with Xi, which could include reducing tariffs on U.S. imports of Chinese goods.
“It’s going to work out very, very well for everybody, and … I look forward to seeing him,” Trump said.
The report points to inflation data and other economic metrics in the wake of Trump’s implementation of global tariffs in April.
“Between January and April, year-over-year Consumer Price Index (CPI) inflation was falling, but it has rebounded since May — after Trump announced his universal tariffs,” the report said.
“Last week, CPI data showed that inflation increased by 3 percent year-over-year in September, the highest rate since May 2024,” the report said.
Core goods inflation, which includes physical products such as clothing, furniture, electronics, appliances, and cars, but excludes food and energy, also increased 1.5 percent over the year in September. Grocery goods also trended higher.
“Studies suggest that President Trump’s tariffs are costing American families around $1,500 more per year and disproportionately harming lower- and middle-income households that spend a greater share of their incomes on essential goods,” the report said.
In addition to inflation data, the report also pointed to jobs data as evidence that Trump’s trade policy is not reaping rewards.
“Rather than reviving manufacturing as promised, Trump’s strategy has also caused the sector to shed 42,000 jobs and manufacturing employment has contracted for four straight months — the longest monthly streak of losses since early 2020,” the report said.
Warren and the other committee Democrats said that despite Trump’s talk about an impending deal with Xi, it is clear China has the upper hand and continues to impose pain on American businesses and farmers.
The report cited rare earths export controls imposed by China, and that nation’s refusal, since May, to buy U.S.-grown soybeans.
Treasury Secretary Scott Bessent said earlier this week that there was a framework of a deal that would see China defer restrictions on rare earths exports, and that also would alleviate U.S. farmers’ concerns.
China purchased $12.6 billion worth of American soybeans in 2024, but just $2.5 billion worth in the first half of 2025 before the effective boycott began.
“Simultaneously, Trump’s tariffs have raised costs on farm inputs like fertilizer and equipment, squeezing farmers from both sides,” the report noted.
The report also says that China has expanded exports in the wake of Trump’s tariffs.
“In September alone, China’s exports to Africa increased 56.4%, to Southeast Asia by 15.6%, and to the EU [European Union] by 14%,” the report said.
“China’s exports continue growing despite U.S. tariffs, reaching record trade surpluses by routing goods through third countries.
