CNBC's Eamon Javers and Michelle Caruso-Cabrera, MCC Global Enterprises CEO, join 'Power Lunch' to discuss the United States' trade policies with the rest of the world.

Donald Trump has signed an order to impose tariffs imports into the U.S. from countries including China, Mexico and Canada.

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Recent trade talks between the United States and China are indicating a potential easing of tensions, as highlighted by Michelle Caruso-Cabrera of MCC Global Enterprises. The negotiations are focused on longstanding issues including trade deficits, export controls on technology, and national security considerations. Both countries are seeking to secure favorable terms, with the U.S. aiming to raise tariffs on Chinese goods and China seeking its own concessions.

The discussions are complicated by factors such as the U.S. export controls on advanced chips, the status of the social media platform TikTok, and structural differences in the two economies. The European Union is also involved in related talks, particularly concerned about Chinese industrial overcapacity and its impact on European industries. While the outcome remains uncertain, the willingness of both parties to engage signals a possible détente in the ongoing trade dispute.

U.S.-China trade talks showing signs of détente, says Caruso-Cabrera

Yeah, Eamon, stick around. Let's also now bring in MCC Global Enterprises' CEO, of course, CBC contributor, former anchor Michelle Caruso-Cabrera. No disrespect to the EU. EU's big deal. European Union's big economy. It's not China. That's the deal. No, the EU is the undercard and now we're getting to the main event. Well said. I wish I would have used that. And as Eamon said, it's also the most difficult. Huge trade deficit that we have with China, something we've been trying to solve for decades. But at the same time, we have issues with our national security. This is constant tension between how much trade do we allow with China and to what degree, when we do that, are we giving them the tools to threaten us and our national security? That's what makes this one so hard. We had no such issues like that with the EU or with Japan or Indonesia or Vietnam or the other deals that we've heard of. But this one is particularly difficult. Yeah, I was actually talking the first time I heard the word CFIUS. First off, I thought it was like a pirate disease that I realized we're talking about national security. And it was about, you know, remember that deal that got scuttled 30 years ago for like nuclear submarine fuel? I think that was Texaco or something. There was UNICAL. UNICAL. I'm dating myself. The Committee on Foreign Investment into the United States. They decide whether or not a foreign company will be allowed to invest in the U.S. There we go. So the first time I heard that. Now we're talking about Nvidia chips. And so I think what you're getting at is when we make a deal, it's not just how much we sell them. It's what are we allowed to sell them or what are the more importantly, what are they allowed to buy? Right. Right. That's the whole notion of export controls. That's why they were imposed. And it was Biden who first imposed the export controls when it came to chips. It really surprised the Chinese. And then Trump, you know, went even harder at it. And this this backtracking on the chips and the export controls is clearly one of the key signs of detente between the two countries. Yeah. Eamon, listen, they're meeting in a room in Stockholm, Sweden, because both parties, everybody wants something. China wants something. We want something. EU wants something. Those are the big ones. Of course, you've got the smaller deals that have already been made. Is it clear what we have an idea what European Union wants because they made a deal? Do we know what China may want? That's that's a really good question, Brian, and that's sort of the big unknown here. The U.S. clearly wants to raise tariffs on Chinese products. And the president is committed to, he said, raising tariffs across the board, you know, 10, 15, 20 percent everywhere, maybe more with China. But from the Chinese perspective, what do they consider a win here is an interesting question. One of the big question marks also hanging over these talks is the question of tick tock. Is that in the mix here? Officials have told me the tick tock is on a separate track, separate conversation entirely. But obviously, it's the Chinese government that makes the decision of whether or not they want to sell tick tock. President Trump says he has buyers lined up waiting to go. But Xi Jinping has not, at least to this point, authorized a sale of tick tock. So maybe that's in the mix. Maybe that's something they want. They want to continue to own that megaphone in the United States. Could the president trade that for the higher tariffs? It's unclear what exactly Xi Jinping would view as a win here in Stockholm. During the first Trump administration, when Trump first tried to ban tick tock, he since reversed that position. But when he first tried to ban it, the Chinese passed a law that said that the algorithm could not leave the country. That the secret sauce that makes tick tock what it is is something that isn't going to allow it to leave. So if there's some kind of deal, I'm not quite sure what they're buying. They think that they're going to buy just the users and then recreate something. But there's certainly hurdles there, as Eamon has highlighted. You've been to China many times. I've been there a couple of times. For our viewers and listeners that have not been there, here's some things they may not understand. You can't use Twitter in China. You're not using Google in China. They have their own, basically almost their own internet. The information flow is controlled. One thing that Scott Besant has said, so we know the U.S. wants, Michelle, is this idea of a rebalancing on the economy. I don't think that just means we buy fewer socks from them or they start to buy some real stuff from us. There's an openness to their economy that doesn't exist. So for years we've had economists come on CNBC with a really thick layer of morality on top, saying the reason we have a trade deficit with China is because Americans don't save enough. But those same economists know you can turn that around and say maybe we have a trade deficit with China because the Chinese don't spend enough. They don't buy much. The dirty secret is they don't buy a lot of our stuff. And that's because the Chinese government has structured everything towards production. And they produce so much now. They call it overcapacity in the rest of the world. You can now buy an EV in the EU for under $25,000. And those are Chinese EVs. They're very, very cheap. And that's when the EU woke up and said, wow, we are going to face deindustrialization if we don't stop this, if they don't start shipping all this overcapacity because they subsidize so many industries. And they can't sell in their own country because they don't have the demand.

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U.S.-China trade talks showing signs of détente, says Caruso-Cabrera

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