Sen. Elizabeth Warren (D-MA) attends a Senate Finance Committee hearing at 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 and the United States is in a “weak position” heading into talks with Chinese President Xi Jinping, Senate Democrats said Wednesday in a new report on the impact of President Trump’s far-reaching tariffs.
The report says President Trump’s trade war “imposed significant costs” on American consumers and businesses, “sold out American farmers” and that the president “strengthened China’s hand while weakening U.S. influence.”
CNBC received the report by Democrats on the Senate Banking, Housing and Urban Affairs Committee the day before President Trump was scheduled to meet with President Xi in South Korea.
Sen. Elizabeth Warren of Massachusetts, the ranking Democrat on the committee, said in a statement to CNBC that President Trump is “putting America’s long-term prosperity and security at risk.”
“President Trump must now reverse course on his trade war with China and stop hurting American families, farmers, and businesses,” Warren said.
Warren’s comments came before President Trump said at the Asia-Pacific Economic Forum in Gyeongju, South Korea, that he was optimistic about reaching a trade deal with President Xi that could include cutting tariffs on U.S. imports of Chinese goods.
“It’s going to go very well for everyone. … I look forward to meeting him,” Trump said.
The report cited inflation data and other economic indicators in the wake of President Trump’s introduction of global tariffs in April.
“Consumer Price Index (CPI) inflation declined year-on-year from January to April, but recovered from May after President Trump announced universal tariffs,” the report said.
“Last week’s CPI data showed that inflation rose 3% year-on-year in September, the highest level since May 2024,” the report said.
Core goods inflation, which includes physical products such as clothing, furniture, appliances, appliances, and cars, but excludes food and energy, also rose 1.5% year-on-year in September. Food prices are also on the rise.
“Studies suggest that President Trump’s tariffs cost U.S. households approximately $1,500 more annually, disproportionately harming low- and middle-income households that spend a large portion of their income on necessities,” the report said.
In addition to inflation statistics, the report also pointed to employment statistics as evidence that President Trump’s trade policies are not paying dividends.
“Far from reviving manufacturing as promised, President Trump’s strategy resulted in the elimination of 42,000 manufacturing jobs, with manufacturing employment declining for the fourth consecutive month, the longest consecutive monthly loss since early 2020,” the report said.
Warren and other Democrats on the committee said that despite Trump’s talk of an impending deal with Xi Jinping, China clearly has the upper hand and continues to cause pain to American businesses and farmers.
The report cited rare earth export restrictions imposed by China and the country’s refusal to buy U.S. soybeans since May.
Treasury Secretary Scott Bessent said earlier this week that there is a framework for an agreement in which China would postpone restrictions on rare earth exports, which would also alleviate concerns for U.S. farmers.
China bought $12.6 billion worth of U.S. soybeans in 2024, but only $2.5 billion worth in the first half of 2025, before the de facto boycott began.
“At the same time, President Trump’s tariffs have increased the cost of agricultural inputs such as fertilizer and equipment, putting pressure on farmers on both sides,” the report said.
The report also said China expanded exports in response to President Trump’s tariffs.
“In September alone, China’s exports to Africa increased by 56.4%, to Southeast Asia by 15.6%, and to the EU (European Union) by 14%,” the report said.
“Despite U.S. tariffs, China’s exports continue to grow, reaching record trade surpluses through third countries.
