More On Trump And Trade

This Politico story caught my eye:

President Donald Trump’s top advisers are rushing to find an escape hatch for a series of tariff increases in the coming months, worried about the potential for further economic damage.

Many of the president’s top economic officials are trying to resurrect the terms they previously were negotiating with China, a deal officials said was “90 percent” done before a sudden impasse this summer, according to a person familiar with the discussions.

This reminded me of a post I did six weeks ago:

Stocks fell nearly 2% after the tariff announcement, and that’s the reaction that rational readers should go with. But if anyone is foolish enough to trust my judgment, here’s a more optimistic take.

I suspect that Trump has decided that he wants to do a China deal before getting into the election year. He knows that his negotiating position will be weaker in 2020, as the Chinese would have an incentive to string things out until after the election.They know that Trump doesn’t want to risk an economic shock right before the election. In addition, Trump wants to run for re-election with a big “win” against China under his belt. . . .

Trump presumably knows that China will agree to a deal based on their best previous offer, which was reported to be more than 90% of a completed deal. Thus Trump knows he can get a deal anytime he wants, if he’s willing to settle for a deal that incorporates China’s best offer in previous negotiations. 

And from the same 6-week old post, how does this look today?

To his credit, Trump correctly understands that the John Bolton’s of the world are foolish warmongers, and Huawei is not a threat to US national security. I suspect that Marco Rubio will be more disappointed by the deal than I will be.

I’m less confident in other aspects of the previous post, such as the claim that an agreement is near, or that the Chinese would still accept the “90 percent” offer (which some sources suggest was rejected by Xi Jinping himself.) But this seems to be what Trump now wants. Any deal would have to wait until after October 1, a very important day in China.

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Comments

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Gary Anderson 1 month ago Contributor's comment

Trump is interested, but then again a temp deal is off the table. So he must give in. If he does not there will be no deal. China is in the driver's seat.

Terrence Howard 1 month ago Member's comment

China needs a deal too.

Gary Anderson 1 month ago Contributor's comment

No way. This is China's opportunity of a lifetime to stuff the chickenhawks who crawl around the Republican Party. You know, like Bannon and Gaffney.