Numbers and statistics aside, there is unquestionably a "power struggle" between both US and Chinese economies; the US is hanging on to its place as #1 biggest economy in the world, with China fighting hard from its 2nd place to overtake the U.S. - would can almost analogize the power struggle between the US and China to the power struggle in F1 racing between Mercedes and Ferrari. This power struggle, combined with the fact that it has made news headlines across the world, is not likely to facilitate trade talks between both countries. Interesting article on the Dow and China-US trade talks: https://www.1stpagenews.com/2019/05/dow-jones-futures-rebound-trump.html
I use this platform to urge that Mnuchin (can I buy a vowel?) and Barr and the SEC investigate how Trump comments are any less inappropriate than Elon Musk's or any manipulator.
Never mind. I forgot the Rule of Law is suspended (as someone else put it) for someone above the law.
Where do I apply. My first name is Donald. My last name has 5 letters. I could sell a vowel.
1
It's we citizens that are paying for it per usual.Between the tax cuts for the rich and the moronic tariff wars, we regular people are picking up the tab for everything.Where there is a shortfall,trump,his administration,and the vile GOP cut programs that only hurt we tax payers to make up for it.I hope you're satisfied,McConnell.
1
Obama’s “TPP” would’ve given USA more clout as a collective and kept our allies together. But Trump has always bullied his way believing other side had more to lose not giving up what he wanted,
However, In those cases Lenders were just trying to get back some of ‘their own money. And now seemingly, with tactics currently engaged with China as redux; Trump is telling Xe 🇨🇳 he’s willing to inflict even more pain on dependent American consumers -until he gets what he wants. (Sigh!)
How does that compute as smart negotiating strategy, particularly when; every leader has read the unwritten book;Trump will cave when reality that other side will not?
Finally, what Trump has managed is to slowly and steadily taken away the shine (perceived “greatness) from a once thought of United States as an indispensable -North Star. Thus, many countries are now finding ways to live without America’s power and even finding it wanting when sought.
Therefore don’t be surprised when next, the financial world markets are riled to their core, it will be an introduction of bushel basket of Reserve Currencies, which will usurp USA’s number one status.
And since America has a lot of debts outstanding; this new currency cartel (most likely led by China-Australian and Germany) will have surcharge requirements in order for USA to participate in future borrowings-sorta like Greece ⁉️
Making America Great Again will be up to generations to come !
1
Here is the problem, as I see it. Many in the comments complain about the Chinese technology theft (they call it transfer). So, if that is the case, what do tariffs have to do with it? Nothing, and as someone says, you're using an old solution (that seems to never has worked) to solve a 21st century problem. And we are asking China to do something that we would never do, change our laws in accordance with another country's demand.
We will ultimately lose this trade war, no matter what Trump says or what happens. Why? Well, when you push someone into a corner to make a deal they don't want to, they will wait for the opportunity to do it to you.
And, guess what? The U.S. will absorb 25% tariffs on China's goods that we buy because they are cheap. The Chinese, however, will not buy already over-priced American goods, with additional tariffs on them.
If the stock market's reasoning is what this article says, then they are in for a pretty good correction. Living a fantasy, if they think Trump will do anything but lie, to allay the fears of the market. Him trotting out Mnuchin every week to say how good things were going was just lying....
3
The chinese, namely Xi doesn't want to lose face.But he has to bend a little. Trump call him up. Get him to explain why he can not compromise or what can I( Trump) do to alleviate your stress.
1
Not much I like about Trump, but the Chinese have been stealing intellectual property, imposing high tariffs, and forcing minority ownership for decades.
About time someone took them on. The question is whether the “great negotiator” will really follow through. From years of dealing with unfair Chinese trade practices, you can be sure the they won’t cave.
1
Yes, that’s what makes Little Donald a great negotiator. Take a hard line, raise the anti at the last minute, then cave at the end if markets start to swoon. I’m surprised that some people have figured this out because he doesn’t telegraph his moves except when he does, which is all the time.
7
The “put” is based upon only a little data and it mostly expects that Trump is not doing anything with consequences that neither he nor those assuming the that they pretty much know what to expect will happen. That kind of complacency has led to big losses.
3
Trump is in territory which he does not know and neither do investors. Nobody has ever played so fast and loose with tariffs and negotiations. Trump never has respected odds when he has done anything in business, which is why his record is so atypical. Trump is never honest and he always tries to deceive to achieve appearances that he likes. So nobody trusts him or can even tell what to expect from his behavior.
10
Trump should have kept TPP in place as it isolated China for the actions we are concerned with but included our allies. He could have included the EU as they have similar concerns. Instead he has alienated all of our allies and often insulted them. He has no credibility and I suspect the whole thing won’t end well.
10
Trump trusts nobody and does not accept advice from his advisers and he cannot work with a team to accomplish anything. He either turns things over for others to do or he tries to go at it by himself. You could describe him as the opposite of people like Eisenhower who are adept at leading great alliances.
6
The Bankruptcy King knew how to rig the system to his advantage, partly because the banks and inventors for a time when along with it. He did it until he couldn't. Same plan this time. He will do it until he can't. But now he is the Pied Piper with a new crowd following him along. Trump doesn't know how to make a deal, because he has never made a deal. But he does know how to keep doing whatever people will let him do which is anything stupid that he can dream up.
18
Is there a Trump put, or does the market understand that deal or no deal will work to America's benefit? Trump is unlikely to sign off on a deal that does not include real enforceable concessions by the Chinese. And if there is no deal, and therefore high tariffs on China, that too, contrary to economic theory in this case be very good for US (and global) industry as it would discourage new investment in China shifting it elsewhere.
2
Trump put or not, all sectors of my relatively conservative portfolio have not recovered since Trump started his trade wars. In particular, tech is still down about 15-20% from where it was only six or eight months ago.
While it's fun to see my portfolio suddenly make relatively large gains, at this stage of my life (8th decade), I'd rather see small moves that preserve the money I will need as I get older. Trump gyrations shouldn't exist.
7
@Barbara In an earlier reply to another article on a similar topic I noted that my IRA went down $6K this week and has lost about $15K this year. So, if WS isn't reacting negatively to this trade war, why have stocks gown down and why have I suffered such a big loss?
Mine is a relatively small bucket of money, and trump continues to chip away at it.
I agree, give me small gains at a time and let my portfolio blossom slowly and quietly now that I'm 70.
4
@Rosie Zimmerman
I recommend you get of stocks and go into tax free muncipal bonds. The gains will not be as great as in a roaring market, but the tax advantages and steady gains will make up for it. Take a lot at them, it should be a safer alternative for you.
1
How do you spell Executive Market Manipulation? Does anyone think Trump's past market manipulative behaviors don't point to the same "pump and dump" as President? Is anyone tracking inside-Executive-Branch trading? Is anyone looking at Trump family trading?
It is a gift to call manipulation "tending to back off". It is "depress and buy" coupled with "pump and dump". Trump's calculated yo-yo market manipulation. Trade on a steady stream of Twitter generated singles... not home runs which would hit the regulator radar.
16
Seth Meyers last night (I'm paraphrasing...):
"The stock market tanked yesterday amid serious concerns about tariffs and the threat of a trade war with China.
'No need to worry; I know exactly what I'm doing,' -- said the man WHO LOST MORE THAN A BILLION DOLLARS..."
20
Ridiculous. Utterly ridiculous, that any president, let alone an economic dunce, should have the authority to levy huge taxes on the American people. That is exactly what tariffs are, and what they do is destructive of peaceful international relations and cooperation, and domestic family budgets. Congress is at fault for letting what is definitely a legislative act be taken over by the president. Trump's tariff's are symptomatic of Congress' stupidity.
16
Wall Street's "Trump" put could give Trump a false sense of confidence. One person stated US businesses don't want to be made victims of collateral damage of Trump's strategy. China will not allow Trump to have a big victory where he forces China to acquiesce to his demands. China is admittedly in a vulnerable position since their exporters are more exposed than the US. China has a long track record of taking advantage of the US trade. The US turned off shoring of manufacturing to China because of their cheap wages and labor control into the biggest global trade giant. China has a mess with their human rights violations, with Xinjiang being particularly egregious, which isn't something that Trump focuses on. Trump wants a huge trade deal with China in which he is the big winner.
2
@c harris
What Trump wants and what he gets are two different things. Every deal he's made so far is almost identical to what was in place before. So much for the "great dealmaker."
10
@Barbara when the market starts to tank, Trump will settle for any deal. His supporters will believe it's a great deal even if it's identical to, or far inferior to any prior deal.
Other factors might cause markets to continue declining. Algorithms and momentum trading are a big factor, and VIX shorting has made a big comeback lately.
A considerable decline is certainly possible.
6
Trump is doing with a presidential Tweet - moving markets for his inside traders, what he did back in the pump and dump day. Apparently the stock market is learning the same lesson now that they did in the good ole days.
No doubt trump will come up with another scam or scheme - oh yea, double the infrastructure investment to $2 trillion - $1 trillion for infrastructure, $1 trillion kickback to trump. That might work. Or it might be a war with Iran.
17
I predict that betting on Trump is a loser's game. I predict that those who expect Trump to behave in a predictable, even semi-logical, or semi-sane manner are, at some point, going to be surprised by the magnitude of their losses. Remember, this is Trump - a lifelong fabulist and fraud-monger. With his core of narcissistic insecurity, Trump might just tank the economy to prove to Coulter and Hannity that he's 'really tough'. At least he hasn't ridden a horse around bare-chested... yet.
27
"If that miscalculation happens and the Trump Put turns out to be less reliable than it appeared, we will most likely find ourselves in a more damaging sort of global trade war than anything we’ve seen up to this point."
To paraphrase the President of the United State, the Honorable Mr Trump "I won't be here when it blows up".
12
@Arthur Y Chan a rational response by China and the European countries we have long consider allies, is to start pulling away from the U.S. and plan economies not so reliant on the largest economy in the world. Eventually, the U.S. will flounder economically under the current administration and other countries should want to be prepared. I can only assume foreign governments are still rational even if the U.S. leadership is not.
This means nothing. The real trouble is Iran. Does Trump have any idea where John Bolton & Pompeo are leading us and the Saudi’s, Israeli’s are pushing us?
17
As Andy Borowitz wrote today in The New Yorker, “Trump to Step Away from Making His Businesses Bankrupt to Focus on Bankrupting Country.”
20
The markets aren't sweating it because they know Trump will not raise tariffs on Friday.
The weekend announcement was designed to roil markets temporarily to get the MSM not to focus solely on his AG being held in contempt of Congress and the NY Times expose on his business losses in the 80s and 90s.
12
The Boy Who Cried Wolf? Another false alarm??
Trumps reckless tweets have grown increasingly stale ever since this bogus trade war started. It's simple. He's a business man to the core. A business man does not like a tanking stock market. period.
I am buying Utilities to hedge.
3
If Trump goes through with his tariff increase, expect a Bloody Monday.
10
Trump has made a very fundamental error wittingly or unwittingly aiding the rich of our nation. Instead of penalizing the corporations for being in foreign lands and sending the goods back here where we consumers bear the burden of his Tariffs taxes, he should have more appropriately taxed the foreign holdings higher than the national based corporations which would have brought back the manufacturing. As it is now, the Congressional Republicans sneaked into the 2017 tax reform legislation a new foreign profits tax that fooled all of you. It's only 15 percent or lower than the lowered 21 percent national rate which still made it cheaper to stay out of the country.
You have to understand, the Republicans think and conduct themselves on the premise that everyone is stupid. They are not. Sooner or later, we all catch up to their deceptions.
After the underlying debate about our manufacturing being in foreign lands, we exerted pressure to return manufacturing. Like every other issue of the day, the Republicans met the challenge of the public concern by deceiving them. The Republicans raved about the new 15 percent foreign profits tax to throw some red meat to the mob, but the truth came out quickly and is still under the interest level of Americans.
They duped everyone, except me.
6
@WITNESS OF OUR TIMES
It's not that they believe people are stupid they know that Americans value money and profits above all else
1
@M Vitelli
In other words; Greed.
1
Why would the stock casino gamblers be worried about the loser? They're not taxed anywhere near enough on their capital gains, nor the corporations themselves on their massive incomes (and even get huge tax incentives), thanks to him and his party-cult. Of course they're dancing a perpetual Carnival on our backs!
But as said broken backs make up most of the actual economy, the brazenness of said stock casino-NOT-"market" is no measure of the health of a country—the "THANK YOU MR. PRESIDENT"[1] trolls here notwithstanding (as ever). The ability of the actual workers under the fat cats to eat, and to live a life without fear of bigoted trolls and death by gun terrorism or climate attack, is.
Humanity is our real economy, as always.
[1] Funny that they keep thanking someone who hasn't even been sworn in, and who they wanted so desperately to lock up. And keep getting her gender wrong.
3
Is anyone wondering whether Trump is tipping off his friends about when he is going to make another announcement about China. He seems to be driving the market down on a regular basis. With that kind of influence you could help your friends make a lot of money
16
@Don
Yes, I've been thinking the same thing.
2
For starters, American consumers ultimately pay for the tariffs and it is essentially a tax, but a hidden tax, so the current batch of financially ignorant Republicans give them a pass. Financial shenanigans (including keeping interest rates lower than they should be) can only paper over the real economy for so long before the poop hits the fan as it did in 2007-2009. In financial terms, the US is "rolling the note". This can go on for a long time, but when the music stops, vast sections of the economy go into serious financial distress and all the fancy financial suits run to the government to bail them out and pass the costs onto the middle and lower classes. The oligarchs have rigged the game.
7
If a stock market spiraling up is what persuades the electorate to vote for this president again, then it only proves what many of us already believe, that this is not a nation based on moral and ethical civic values but rather unfettered greed.
8
Apparently Trump is unaware that the Chinese also follow markets and have studied his behavior in the negotiations over NAFTA and with NK. He consistently talks an elephant and brings forth a mouse. He and his advisers have spent the last three months talking up the status of the negotiations with China and now all of a sudden they have fallen apart. So were Trump and co naïve or lying?
5
@John, Love your analogy, "...talks an elephant and brings forth a mouse." It totally encapsulates everything that comes from DJT. Thank you!
5
Like dealing with the corner drunk or odd ball, the markets have basically learned to ignore him because he is incompetent and only worry/fight back when he does something that is obvious harmful to them ie permanent and not fleeting from day to day.
He is basically a free trader and thus Wall Street will put up with him.
1
According to recent reporting by the NYT, Trump made millions in the market by taking a small position in companies, circulating rumors that he would take over, and selling on the bump. Until everybody caught on and then he lost millions. These short term strategies are not an economic policy.
7
The consequences of trade issues with China have to be resolved sooner or later. I agree, a trade war with China will not be good for the US economy, but it would be terrible for China (i.e., perhaps crushing) and its desire for world dominance. Trump is willing to face this issue head on. You hear the Western Europeans talking about unfair trade practices with China, but they are not willing to confront China. I presume it is because the Western Europeans want to keep their version of socialism in place and prefer a slow death of their economies vs upsetting their electorate,
1
It is scary that the market responds to what Trump says. He is notoriously unreliable and untrustworthy. Hopefully, the suggestion that there is a Trump put in place is just a figment of the author's imagination. I hope the markets are responding to ground truth and economic fundamentals.
2
The real questions are when will the rest of the world stop taking the USA seriously. When will they impose sanctions on the USA? When will 6,7 billion people tell the people of the USA you are part of us, not the lord over us?
There are a few more questions, they all stem around the world's need for a reserve currency or the lack of a single centralized one. Sooner rather than later the USA is going to stub just one to many toes, and be knocked into the gutter from which it has been acting as the world's central bully for these many years.
I once thought about running for POTUS, so I sat down and thought a lot of thoughts about how we as a nation could be doing better. It was 2007. Along came a guy that got a peace prize, I still don't understand why he was due that prize, he wasn't very peaceful in his term in office. Now the office holder is shall I say as bad or worse than the guy before him. I had ideas that have been talked about by others, yet we are still a warring nation, fighting the whole planet as if we aren't part of it. The Empire is about ended for the USA, there are visible cracks the world can see. Time for 6,7 Billion people to stand up and say Our time is now, and get on with living in peace.
4
@Charles E Owens Jr while it is true the prior administration used force and power to achieve objectives of stability and eliminate threats from rogue groups, they tried to do so while protecting the innocent women, children, and communities. Maybe not always successfully, but they did try. That is very different from the current group in the White House that wants to dictate how people will live. They don't even respect people with different opinions in the United States, let alone people of foreign governments. There is a place for force, but it needs to be used sparingly and with great consideration after all other diplomatic options are exhausted.
Trump seems to be impervious to financial losses as long its somebody else’s loss. And, since the American people are his banker this time, we’ll be left holding the bag.
7
Contrary to the assumption that trump can turn this trade war on and off like a faucet, the Chinese and the rest of the globe are more astute than that. Every time he pulls one of his stunts the rest of the world prepares more elaborate contingencies for a trade economy that is sans USA. The rest of the world will make long term economic decisions that are far less reliant on trade with the USA. USA farmers are having a hard time of it as many of the fields in the midwest are still inundated or too saturated to plant. Then the decision of what to plant. Shorter growing seasons limit what can be planted and trade turmoil makes that decision even harder. For instance, the Chinese can go elsewhere for soybeans. As long as trump is around the world cannot trust the USA to be a reliable partner in trade or anything else.
4
The stock market is up because Trump and Congress passed a corporate tax cut bill that handed public and private corporations trillions of dollars. Plus he cut regulations that protect consumers and the environment and cut enforcement that handed corporations trillions more. Plus he increased federal government spending that gave corporations trillions more. So a little tariff war is no biggie.
3
Good point about a funny circular system.
My theory is that the person who brought us this breakdown in talks is Paul Krugman. He prophesied one month ago that Trump would settle for a nothing-burger and declare victory. Then, since the Chinese are unaware of Krugman's checkered record when it comes to prophesying, they relied on his analysis and they took the risks that have scuppered the expected deal. (Just a hunch).
Call it a suicidal prophecy.
I am betting that Trump will worry more about his legacy than about a second term. I am also betting that Krugman will go on underestimating Trump, and the Chinese will disregard Krugman's predictions from now on.
2
“a conviction that nothing really bad will happen”
And this my friends summarizes the predicament of our country. Tens of millions of our citizens continue to think that this circus show can be consumed for entertainment value, or seeing “the other side get triggered” because in the end, nothing really bad will happen. Or if it does, the bad things will happen to “the other side”
Remember how fast the market fell in December? And you mean to tell me that things are meaningfully different now to not have a repeat, or worse performance?
2
Why has the market's reaction to Trump's bluster? Let's see what happens today when Mr Powell speaks. Maybe the market is anticipating Mr Powell's put. If that is the case, we'll know by the close of business today. He will be speaking at 8:30AM.
1
With such a great, proven track record of success in business how lucky we are that we have 'businessman' Donald J. Trump leading us through deficits and tariffs.
4
Tariffs are a tax paid for by the consumer. In this case, the American consumer. When the price of a good or commodity increases, the prices of substitute commodities will likely increase. Increases paid by the consumer. Is this good policy at a time when unemployment is at a historic low, yet the federal deficit has risen to an unacceptable level? Presidents and Congresses that like tariffs simply do not believe the American consumer has the right to keep their hard earned monies.
8
Elon Musk, the CEO of Tesla has been at war with the SEC over his market moving tweets, now he has to get every tweet approved and make sure all the information in his tweets is accurate and public knowledge. Why should the President of the USA be treated differently, we cannot be certain he is not benefiting from it, in fact his past record indicates he will almost certainly try to use it for his gain.
46
The stock market is an important metric to determine the health of the economy BUT it’s not the only metric and it shouldn’t be THE metric used when there’s a trade war, especially for the president.
How does the stock market explain the consequences facing farmers who sell soybeans, milk, and other major US exports in the agricultural commodities market?
Or what about the employees in the auto industry? An industry that is suffering additional costs because of this trade. And we all know who will pay the consequences for those extra costs.
But I guess this is what happens when we elect a con - I mean - “business” man as president.
21
It's not a problem, until it is...
The upward trajectory of the world economy is slowing...even in the US.
But my question about the trade war is, what commercial secrets are there in the world today to guard? Within hours of being released for sale, any profitable item is being dismantled and reverse engineered by potential competitors. Employees and research aren't firmly tied to one lab or researcher and the pool of today's employees are more cynical on the employer/employee relationship, and even on where an employer is located.
11
Belieeeeve me, winter is coming.
Trump is convinced now that his trade war with Dgina is paying off, so he will hammer them with tarifs in order to look like he is crushing them and winning. Chineses cannot affort to loose face in Washington, so they will turn around and wait for next november. Wich will set off one of the worst recessions in History.
I personally removed all my assets from stock exchange and is looking for incoming the fall off. Brace for impact.
8
@Tristan Roy november 2020 that is
So the question arises as to whether stock markets reflect the state of mind of a rational investor or the trading talent of astute institutional investors? A related question is whether a debt-heavy consumption-driven economy will ultimately reduce spending as prices for imported durable goods rise?
The Trump ship of state may well be headed full throttle toward impact with consumer confidence. The tipping point occurs when consumers elect to reduce discretionary spending as prices ratchet upwards. “Puts” may stabilize stock market valuations in the short term, but changes of socio-economic behaviors can prove daunting.
7
@Stu Sutin - Excellent comment and insight. If Trump does impose a 25% tariff, the stock will have a reaction, which will be the first wave. Second wave of financial discord will take several months to show up as consumers face the reality of higher prices on just about everything they buy, and stop or radically cut back on shopping or buying any number of items made in China or made with components manufactured there.
I am sorely afraid of the irrationality and meanness of this president and administration. Wanting to harm the Chinese, makes all too much sense to this administration, so I have no idea of what will come but I am afraid.
What we should be is a partner with China, but this administration wants otherwise.
5
Sooooo.....wait. Stocks are down because the president tweeted about tariffs. But they're not down more because of the president? How does that theory make a lick of sense?
3
Ever since Trump decided to mess with the Chinese on tariffs the stock market has been bumping along pretty much flat. The DJIA is only back to the same level it was at in January 2018 - nearly 18 months with no growth. As soon as I realized Trump was serious about tariffs I put my 401k in safe bonds. It will be this way until Trump decides to stop bumbling and stumbling around in international trade.
10
@BaldySanta- Sadly your bonds aren't safe either.
@HL Based on what evidence?
Why aren't investors panicking? I'm guessing it's because they, unlike the average lefty, can think logically.
@SCPro
I assume left means left-handed. But I don't understand what they has to do with investing.
8
Most Americans have a short and limited perspective about history. Ask 100 Americans to explain the Boxer Rebellion, you will get 99 blank stares. Ask a Chinese citizen, and you will get an earful about how Westerners tried to subject the Chinese to colonial status. There is no way the current Chinese leadership is going to lose face and accede to US bullying tactics. They may offer an empty gesture to allow Trump to claim a victory but they will not comply with Trump's demands that they fundamentally change their nation's strategic economic plan. And they have many cards they can play when it comes to North Korea, Iran, Venezuela and other points of contention.
20
Ask yourself this as your criticize Trump. Where was Obama, Clinton and Biden for the last 8 years on this issue? I'll tell you, no where to be found! He didnt address the issue of Chinese cyber hacking, Intellectual property theft, forced tech transfers, and not opening up their markets as China promised to to for years and hence is responsible for the mess Trump is trying to clean up. So for all the criticism of your POTUS trying to change this I bet your hate for Trump never allowed simple minds to ask , why didnt Obama take any action on this? Hmmmmmmm
4
@greg
Because it is a bogus issue. My experience in technology work is that the US steals more than anyone. Plus we hire many Chinese and Indians to work in technology because we can't get competent Americans to do the work.
I recall a meeting at Wright-Patterson AFB with the AFB Research Lab on a contract my small company had won. We had a Chinese individual as a subcontractor because he had the patent the AF needed to use for this work. As the kick-off meeting neared my AF contract officer called, worried that the Chinese subcontractor was not a citizen and his parents lived in China. They okayed his attendance anyway and the Chinese subcontractor requested a meeting with the head of the Materials Lab, who was Chinese-born with citizenship and a clearance and had done a lot of published work in the field. We met, my Chinese subcontractor and the Chinese director of the lab, with an AF Captain as escort. The two Chinese had a long conversation in Chinese that neither of the escort or I understood. Think about that.
8
@greg Obama's response to China was the TPP which excluded China. Had it come to fruition with the US as leading member it would have created serious leverage over China. It's called preparing the battlefield.
Candidate Trump said that China would come in the back door. He never explained what, if anything, that meant. He wasn't pressed on this, his nonsense was allowed to stand and we're not in the TPP.
So now Trump will have to choose between really confronting China in a situation where that could lead to a recession, undermining his re-election chances or trumpeting a watered-down deal with no teeth to avoid that.
A watered-down deal now will make it harder in the future to reach a real deal.
1
@greg Actually, Obama agree to the TPP which was essentially aimed at reducing China's economic influence. Trump didn't like it 'cause Obama had agreed to it and withdrew it to play his own little games!
2
Trump is not going to sabotage his "epic" and "monumental" deal with the Chinese by imposing new tariffs -- everyone knows he's a bully and blowhard. Come Friday Trump or one of his talking dogs will declare that the Chinese have moved substantially toward his position, enough for him to hold off on new tariffs.
7
For the stock market, everything is fine until it is not fine. Let's not forget those who saw trouble looming back in 2008 kept it to themselves so they could off-load the worthless toxic mortgages and shares in companies that held them. The nature of speculative markets is for the players to pretend everything is fine until the tipping point is reached. Then it's sheer panic. We saw this in 2008. We saw this in the post-Brexit vote crash of the British pound in 2016. It's often a violent cycle of stubborn optimism alternating with panicked reaction.
We are in the stubborn optimism phase. We'll see what happens.
14
This sort of market driven politics makes me glad that I am not a Baby Boomer or Gen X. Many from this group seem to fuel the market driven burst that seems to be lurking.
Forget the Trump Put. It's all about the Covered Wagon Call. With all the snake oil the man pushes, we're going to need a lot more covered wagons to sell this stuff out the back.
7
The NYSE is Wall Streets piggyback. No way they will let anything disrupt their cash flow.
@Ronald Baker So there'll never be another market crash? What has changed?
I had no idea about the Trump Put. It is high risk trading insurance devised to deal with an unstable President, amazing. Seems smarter to just elect a stable President.
17
It is an error to assign a rational calculus to Trump's behavior. The reality is that he is a slave to his emotional impulses. That doesn't mean he won't back off from the China confrontation if the stock market tanks. But the response will indicate that fear has overtaken anger in Trump's mind, not that some sort of objective analysis has kicked in.
The Chinese surely understand this dynamic. Their strategy is likely to give Trump a visible symbolic victory on a secondary issue while holding firm on things that really matter to them. This ploy could work if Trump doesn't figure out that he is being played, in which case the probable outcome is that his anger will be further stoked. So it's risky.
Another wild card here is that Trump is mostly drawn to politics by adulation and a sense of power and prestige (plus some opportunity to deflect money into his personal account). He is interested in policy only to the extent that it offers him an effective political tool. Immigration is an obvious example. His immigration positions are dictated by a desire to inflame his populist base, which means that solving the problem may actually be politically undesirable. Trump is mostly bored by the nuts and bolts of policy debates on their merits.
But trade may be an exception. Trump started railing about unfair China trade practices years before entering politics. His views here may prove to be more stubbornly held. If so, a stock market dive may not be enough to push him off course.
17
I’m sad to tell the world, but all our various economic systems are failing. Resources are starting to run out. The world’s population is compounding. No one is serious about climate change. Religions hold no solution, and many actually endorse killing or simply death. At 75 my personal hope is to die a peaceful pain free natural death before the world goes away in a hand basket. It’s only going to get worse and sooner than we think.
7
Hate to tell you, but the ice is very, very thin....
6
I'm not so worried about this president screwing up the equities markets, it's not like many presidents before him haven't done that to a greater or lesser extent. And if he did significantly screw up the markets and our economy, the voters would exit him and the political party that made it happen in no short order. What scares and worries me is how he, aided by his mindless yes-men, will react to a genuine international crises, especially one that develops faster than his small, simple, unschooled brain can handle. And that would be almost any international crises. We are not, as great as we think we are; omnipotent, wise and all knowing. We make mistakes. A little one only gets 60,000 of our warriors, and helpful Australians, killed in a far off Asian country. But at least we learned to cut and run on that vanity war. The next mistake under this president could get hundreds of thousands or millions of the good, bad and ugly killed. Now, that’s a worry we should all fear.
11
I think it's a safe bet that the Chinese -- like all major-country rivals of the US -- did their equivalent of high-fiving around the TV the night Trump won the presidency. In that light, I imagine the Chinese will be happy to see him win again in 2020. The damage he has done to US prestige, alliances, politics and social fabric is far beyond anything an external rival could do.
No only that, given their collective ignorance, chaotic behavior and woeful arrogance, Trump and his ruling cabal have no doubt been seriously underestimating their rivals, allowing them the space to make major gains internationally, and even, on occasion, to run rings round the flailing giant.
The Chinese know their man far better than he knows himself. It doesn't surprise me, therefore, that China seems to be going along with Trump's antics on trade, instead of hitting the US where it hurts and interrupting the process of national undoing that began with the GW Bush administration.
5
As I see it, Everything about Trump is short term gain, long term pain. His track record as a bankrupt businessman says it all about what he will do for America.
Has Kim Jong Un given up his Nukes, has Madura left office, are the Ayatollahs submitting to Trump? China is smart, they know how to play this fool. China could easily sell of the US debt they own and put the US economy in a tailspin.
American is not competitive as a global manufacturer, increasing tariffs will result in goods being made in Vietnam, not the US. US consumers will pay the price, less so China which is not a democracy and can handle short term pain.
11
@Joseph B
After what happened to Qaddafi, Kim Jung Un would be a fool to give up his nukes.
2
Don't bet on Trump's "puts" or for that matter his capacity to understand what he does. He is impulsive, childlike and in business matters, simply not very bright. Look at the billion+ $ loses he has taken in his own businesses (today's Times). He can easily do the same to the U.S. economy.
11
Because the markets know as long as we have a pro business President the economy will stabilize.
If Trumps looses, plan on a depression.
And all you haters out there, the folks you say you care about will suffer the most.
1
@Joe Paper
Based on your grasp of facts, I doubt you have studied the economic history of the last 4 decades. In fact, when republicans have been in charge, they have supercharged the national debt, and in the case of Bush 43, sent our economy into a near depression. The increase in national debt blamed on Obama, was necessary to save our country from republican malfeasance.
Parroting fox talking points makes some people feel good, but ultimately is a form of self delusion.
17
@Joe Paper
Republicans from Reagan to Trump have exploded the deficit and the debt.
Democrats have cut the deficit (to the extent even of a budget surplus under Clinton) mopping up after the Republican sugar highs.
3
Publicly traded companies are so overly priced on the market, that these trade deal make no difference. What will make a difference is when the flood of cash from the Republican tax cuts wear out, and investors suddenly realize that the corporations' valuations' are based on nothing but paper. Companies are not putting the extra cash into expansion, product research, or infrastructure, but into the executives pockets.
11
@Patrick Stevens And into massive stock buy-backs and corporate debt. Talk about a bubble waiting to be burst.
4
I hope the SEC is examining trades that benefited by Trump's trade tweets. With the derelict in chief's history of manipulation, I would be surprised if someone in the Trump orbit had not profited.
19
China knows that if tariffs continue on, that supply lines will eventually be altered and we will import our cheap stuff from other countries with low labor costs. Then other countries will switch too as the volume of the US market will lower costs of production for China's competition. China has already lost market share to Vietnam and other competitors...They need those exports to finance their tech push and keep people happy and employed...Trump, by going on his own, is hoping he'll lock in a better deal than the EU and other competitors of ours..He knows we have more leverage.. If it works, it will give us a competitive edge...Hopefully he'll stand strong and not back down until we do...
7
@Lindsey E. Reese, You give DJT way more credit than he (or his minions) deserve for astute economic negotiations. Just read the NYT article on Trump's tax returns in the 80s and 90s to discover he is an empty-suit full of hot air!
2
China has grown to the point where it cannot continue growing its GDP by exports. At the same time it has more people than any other country in the world, and they are not consuming much (compared to most large economies). China simply have no choice but to convert from an export economy to a domestic consumption economy (the alternative is going Japanese). A trade war would give the Chinese leadership domestic political cover for taking the hit, and converting their economy to a slower but sustainable track. I think they are pulling Trump to make a mistake that in the long run will be to their benefit - and a lot more detrimental to US than Trumpists realize.
32
Traders who were fired for misjudging the put-call ratio write blogs about how the world is going to end at any moment.
2
The stock market is no longer coupled to economic activity.
A few of many reasons: The decoupling started with Reagan era SEC 10b-18 rule which effectively legalized stock price manipulation, Clinton era Graham-Leach-Bliley which effectively legalized proprietary trading (gambling) with FDIC backed depositor's savings, revoking uptick rule, Volcker rule, etc.
Why on earth would any person/entity believe anything, or negotiate with a narcissist with a decades/lifelong record of lying, cheating, ignorant nitwit is beyond me.
29
Yup! People are catching on. Just like his Pump & Dump scam decades ago.
8
This article is close to insane. The Dow lost more than 600 pnts yesterday and gained none of it back today. The Market has not reached the 26,600 mark that it hit in January 217 yet the Times business section continues to say that the market is spiraling upward. For god's sake, when is not going up for 17months an example of a Bull market? Sounds like the definition of stagnation to me.
12
@Greg Jones
Thank you for pointing out facts.
We are hanging by a thread of confidence propped up by a grifter.
12
Because the markets know that Donald Trump is a bloviating buffoon who can't wait to surrender without a fight. Why sweat? When a yawn will do.
10
Doesn't this column just epitomize what's wrong with our president? Even on matters as important as our economy, interest rates, trade, tariffs...no one believe a word he says. And, sadly, for good reason.
22
The perfect storm. Mother market has come for her loan.
Why should wall street care? We will send they a trillion in socialism $'s if needed.
7
A very interesting article. Of course, Trump's (inappropriate) insistence on low interest rates forces baby boomer retirees to stay in the stock market - despite fears over the con artist in the White House. The incentive to overlook reality is high. A scary problem here might be that Trump actually wants to create a global trade war, sooner than later, in order to plunge the country into chaos as an excuse for imposing some form of martial law - indefinitely.
7
@JCamexactly ... Madoff on steroids. The money isn’t there.
4
It helps if you understand that Trump's foreign policy is based on nothing more than market manipulation for profit. As the NYT reported today, Trump resorted to market manipulation when his other frauds quit working. As president, he is free to cash in on futures trading in stocks and commodities based on "policies" he plans to announce. Just as his threats of corporate takeovers were eventually shown to be fraudulent, we can be sure that he will never really pull the trigger on his empty threats against foreign trade partners. In all likelihood, his healthcare and defense policies are also designed to manipulate markets to make his stock purchases grow in value. Because "Justice Department Guidelines" nullify the U.S. Constitution, SEC law and common sense, we'll never know.
26
Overestimating the Chinese economy and underestimating Trump are 2 big mistakes.
The numbers look good for the Chinese, but not good enough to carry 1.4 billion people if things start to go south.
Trump likes to be unpredictable, even though so many think they "know" what he'll do next.
They don't.
Trump knows he can crush the Chinese economy in a fortnight and that the resilience of the US economy will diminish much of that collateral damage, as a black hole forms where China once stood and the world enters another global recession.
It wouldn't be pretty, but this is Trump we're dealing with here.
He doesn't care.
11
@Ken Russell What if China unloads US treasuries? Sorry but I see no trade crisis large enough to justify the destruction Trump has or may wreak just to appear tough.
7
@Ken Russell Try it an suffer at your peril. The US consumer is dependent on cheap imported goods from China. US consumers will pay for the tariffs on Chinese goods which will not result in more jobs for Americans but perhaps more imports from other low wage countries like Vietnam. The US is a fragile democracy that can not tolerate any hardship unlike China.
America does not produce enough highly skilled workers to compete in manufacturing and the cost of labor including health care is not competitive.. The world would rather buy a Toyota or Mercedes not a GM or Ford.
6
I agree with Ken. China still has a lot of poor people, have to deliver to the people that rely on one person/one party in Xi and the Chinese also have huge debt and lets be real whatever GDP numbers they're putting paper you might as well deduct 2.0% off that number as they lie about everything. As for selling treasuries? Not going to happen as it would hurt them as well and they have to out their money somewhere guaranteed to make money, beside other counties lke the Saudi's ,Qataris and Japanese would gladly buy it up those treasuries. Oh and lets not forget the power of the US dollar as the reserve currency.
1
"Yet the Standard & Poor’s 500 index was down only 2.1 percent in the first two trading days of the week, and little changed in Wednesday’s trading as of midday."
I'm not a stock trader, but I'm guessing that if I knew in advance of such a drop, I could make some good money fast by shorting the market. Who thinks the Wilbur Rosses and Steve Bannons of the world would be ethically above working such a scheme with their pal Donnie? The Times reported yesterday that he worked such a scheme 30 years ago, threatening hostile takeovers and cashing out as the stock peaked. Folks realized quickly enough he wasn't serious, just scamming, and that was that.
Seriously. Who thinks Trump would be above such a scheme? The markets seem to be figuring him out, again. But he's done this quite a number of times as President now.
49
Well, right, they never sweat it until they sweat it. Then it's sweating blood.
Further, these alleged negotiations by Trump are not what anyone really believes to be actual talks.
Actual negotiations require skill, knowledge, intelligence, and both sides must believe the other is negotiating in good faith.
None of these virtues are even possible with Trump.
7
China needs this more than we do. it is unbelievable how many do not understand that China's economy collapses without loans and exports. if China collapsed tomorrow the US wouldn't owe anyone money and we could get cheap labor in a ton of other countries. why do you think we really want peace with North Korea ??
4
The Chinese badly miscalculated on this one. Liu He is coming to Washington in the hope of buying time. He's got one day in which to negotiate....something. Neither the Chinese nor Trump can, in their own view, lose face by undoing what brought them to this point. We live in "interesting times."
1
This is "insider trading" out in the open. The word goes out that Aluminum is getting a Tariff. Trump's buddies sell their Aluminum stock. The market drops, His buddies buy while it is low. He says "oh I changed my mind" and the market goes back up. Thank you for giving it a name "the Trump Put"
46
Trump has shown his hand to the Chinese just like he did in the late eighties, when he played a corporate raider but after a few too many Bluffs. Wall Street figured out his con and the game was up. I figure the Chinese negotiators are at least as smart as Wall Street players.
8
Trump showed off his guts during the last meeting with Kim Jung Un of North Korea.
If Chinese delegates come to the US without right answer, everybody knows what will happen next.
And, Chinese guys came. What does it mean? Situation seems under his control. That's why Wall Street guys are relaxed.
Trump is doing what he promised to do during the campaign literally. He is an outlier as a politician but a standard-bearer as a statesman.
4
@Young
Statesman? Are you joking? Having secret meetings with Putin is not statesmanship.
5
If there is one thing that the Chinese understand better than us Americans it’s corrupt governs officials. They know Trump and his cronies better than the rest of us, I’ve been convinced for a longtime that he and the family is trading based on his tweets prior to him hitting send. Does anyone really think they could restrain themselves? The Chinese are probably willing to play along for as long as Trumps in office but essentially never agreeing to anything.
3
Trump is so predictable.
From nytimes other article about trump’s returns from 80s, he’s obviously playing the “corporate raider” game again, but this time he’s crossed the line by messing with our economy.
In the 80s trump would buy up stock in a company, announce (threaten) a takeover, and when its stock prices shot up, he’d make a killing selling off his stock and discard the fake takeover.
His last attempt at his fake corporate raider game was in ‘89 when he pulled the same stunt with American Airlines. This one made me lol. Investors got wise to trump’s fake takeovers and trump lost millions on his AA when the it failed to go up.
Now doing it again, same M.O., but with China tariffs. Threatens China with new and more tariffs, knowing stock prices will drop. And whether or not he adds more tariffs, he also knows stocks will rise again. He’s manipulating the market again just like he did in the 80s.
I’d sure like to see what the trumps are buying on NYSE this week.
11
There was an inversion. They're pretty reliable. Just a matter of time now.
1
How is it possible that such massive economic authority and power can be placed into the hands of the Executive branch? Tariffs should be the purview of Congress. This country has the most corrupt, inept, unqualified buffoon in history controlling these outcomes and Wall Street doesn't care? Just wait until something real happens. It will take very little --a tweet, a small earnings disappointment, a blip in some index--to set off a panic wave on Wall Street. The loss of wealth will be staggering.
7
Not to throw salt in the sore, but Trump was talking apocalypse in trade talks with us and in the end agreed to a deal which has extremely small changes to the original. Remember those dairy tariff Trump said had to go or there's no deal? Still in the deal. The same happened with South Korea, very minor changes. The Chinese aren't stupid, they know Trump is bluffing and is more concerned with claiming he made a deal than worrying about the details. He'll just lie about those like he does on the new NAFTA!
28
When Trump gets around to it, he may drop the tariffs on steel. wood and aluminum on Canada too. But he knows Trudeau is so weak, that he doesn't have to. Canada was ignored in negotiations on the treaty..Then was forced to capitulate to Trump and Mexico without negotiations or even trying to get the tariffs removed...Very amusing trade diplomacy! You'll need a real leader and more leverage to get those tariffs removed...
How can one obstruct justice to a crime that (as we now know) did not exist?
1
Given who we are dealing with, we should be very suspicious of the possibility that the Trumps are trading ahead of major economic announcements (such as the threat of further tariffs).
Has anyone looked into that?
14
@Thomas Kurt I hope so; Trump has an history of buying some stocks and annoncing his intent to make a take over making the stocks moving higher...when Trump never did and sold the stocks owned quietly!
4
@Thomas Kurt I'm suspicious if he's helping his friends at Maralago too. There's definitely something fishy about this whole thing.
5
No trade deal is good news. It stands to reason that the seller and purchaser will always pay more . In simple terms inflation will always be in the rise ahead of wages. Deal no deal
Trump seems intent on following the precedence of Nixon's obstruction of justice and the Smoot-Hawley tariff act. The combined consequences will be calamitous.
6
The standard Trump strategy is to bluster, to surrender, and to declare victory.
If that is his plan, no problem.
But if he is serious, I cannot see China backing down.
15
@John Graybeard
He's making a fortune from insider deals with all that "bluster." Don't be misled that it has anything to do with you, the United States or China.
2
We must remember what the Chinese negotiators surely know:
Mr Trump just says stuff.
What he says bears no perceivable relationship to the truth.
What he says bears only the most fleeting relationship to his actions.
Whatever else one may say about the Chinese communist party, its leadership has not been either stupid or naive. We may expect that China has plans in place for a wide range of outcomes to this week's talk, and will not hesitate to use them.
Can we say the same about Mr Trump. Mr Lighthizer, to be sure, probably has a pretty strong set of contingency plans. But is there any reason at all to believe that Mr Trump will follow Mr Lighthizer's plans?
8
@Pquincy14-
Trump has been protected by people like General Mattis and Don McGahn. In this case Lighthizer, Wilbur Ross and Peter Navarro are egging him on.
2
Agreement reached with Trumpt will not be worth the paper on which it is written.
67
Don't be too sure. Anyone who lost an average of $100 million a year in failed business ventures; who bankrupted a casino when the gambling industry was widely regarded as a license to print money; and especially an unstable narcissist with a very small brain, can destroy the strongest economy on a whim.
173
@Christy Headline yesterday: Farm commodities at 47 year low (adjusted for inflation). I would say that he's done some pretty severe damage already.
Even my Trump loving brother-in-law, a soybean and wheat farmer, has taken to calling him (expletive) tariff man.
19
@Christy ...and the surest sign of a demagogue will be: his base will adore and defend him to the hilt, even as he shoots them in the back.
16
@JCX-yes and no. Some will defend him if he re instated chains and slavery but others will learn especially if they get hurt economically and realize he is a fraud.
It seems evident the Chinese have the upper hand since everyone including the Chinese know how important the stock market is to Trump. Sad!
22
Trump became the "meh king" of takeover bluffs based on the Times headline article today. His lack of knowledge about everything other than how to concoct chaos and personal press, good or bad, makes him dangerously dismissible. I still don't trust he won't have a bad day and do something truly irreversible.
19
Yesterday’s NYT tax expose includes that 1985-94 Trump got away with securities fraud by investing in stocks and then making announcements designed to increase the price (e.g., takeover intention that he never intended). As President, he similarly manipulates markets with random statements that have no other purpose. Jim Cramer is onto this, we all should be. As Michael Cohen says, the guy is a scam artist.
71
Although the stock markets and the different economies around the world are interrelated to some extent, the markets’ performance are not dependent on political rhetoric.
Every time when the markets have been fluctuating as they have the past 12 months, my gut feeling these past 6 plus months has been that many pundits critical of President Trump, possibly have been hoping for the US markets to take a big hit in order to blame the President directly, without any care of how such a crash would impact millions of people.
The Trump put has lead to a ruder-less federal reserve, unsustainable debt and threatening a multi-lateral world trading system based on the rule of law.
It took President Bush almost 8 years to destroy the US and world economy. I wouldn't underestimate Trumps ability to do it in one term. We lake the key ingredient for the continuation of the virtuous cycle that began under President Obama, virtue. It's been replaced by viscous.
19
The main problem this time is that China is too big for the US to bully. Its manufacturing sector is in fact bigger than the US and Japan combined now after surpassing the US in 2010. Our mindset is too far behind the time and probably is still set about 20 years ago.
18
Trump's playing with people's perceptions to manipulate them seems to be well know in the securities markets.
1
Trump bullies China and the markets - heck, anything and anyone that gets in his way while he blunders through the White House like a bull in a china shop.
China and the markets just bully him back. And like all bullies, he’s a coward. Soft and squishy on the inside, easily rattled.
13
Think of this, America. Our national economy is in the hands of a Billion Dollar (plus) Loser!
82
Trump can't afford a weakening economy in 2020.
That alone would probably cost him the election.
So he has to be more pragmatic on trade than he probably prefers to be.....thank goodness.
I and my anti-Trump Republican friends have been tolerant of his buffoonery only because we've made good money from our investments since his election.
Or am I missing something here?
5
Full speed destruction of our Constitution, our environment and climate is what you call “buffoonery?” And this is acceptable because you’re making money from the destruction?
18
The Market will do what it does and the "pundits" will continue to invent plausible explanations - BUT
Trump is unquestionably manipulating the Markets with his insane, ignorant Tweets. Just watch huge swings in equity values following some blithering threat by The Dotard, especially where fictitious trade agreements are concerned.
I would suggest that the SEC and Congress inspect the finances of Trump associates with a temporal microscope to see who bought/sold what and when. A prime example is when Trump creates discord with Iran and/or NK - Stocks like United Tech, Rockwell and other arms producers shoot up. Who knew this in advance? The same goes for companies heavily linked to public threats of Chinese trade sanctions.
All these "executive" (ha) issues should be kept confidential and not allowed to be Tweeted. Since they have been, linking them to investments by Trump, Mnuchin, Ross and all of Trumps "buddies" at Mar a Lago can be investigated. Something very productive for the SEC if Trump hasn't throttled them too with "true believers".
91
@RealTRUTH
Stock indices futures are down big time after Trump declared this evening at a rally that China broke the trade deal. Hmm...wonder if Trump & Co shorted the market this afternoon.
2
@RealTRUTH...trump also has a history of helping out cronies that have shorted the market.What a disgusting mess he has put us in.Will his supporters start drifting away when the cost of EVERYTHING goes up.. it's already happening.
the economy is the only thing trump has going for him and the chinese know it. as such, he'll do just about anything to keep it going until after the election. i expect another trumpian announcement on a "major" trade deal with china that will really amount to next to nothing - not unlike the smoke and mirrors used in the north korean charade. planned economies do not have to deal with two and four-year election cycles - they'll just out-wait us while continuing to rob us of intellectual property.
55
Don't be so sure, Mr. Irwin. Escalate this to a point where the Chinese start cashing out of U.S. Treasury bonds and bodies will be flying out of windows on Wall Street again.
19
@Ivan
You know what is good about US Treasury bonds? It is in US dollars, does not matter how the Chinese plan to use it, by a long or short circle, in the end it will have to be in one form or other of business with ... USA.
1
If the Chinese begin to divest huge sums of their investments to quickly out if the US they would be hurting themselves because their exposure in exporting goods to the US will be impacted.
As of now why would they even consider divestiture when the US is a much better place than most any other country for investing in the government bond market, unless they have over extending themselves in projects in Africa and other high risk countries?
Let's not forget that there's another party to this drama: China. I'm convinced that the Chinese--not being remotely naive--have become quite familiar with the Trump playbook of strident threats followed by retreat and retrenchment. They will assume that this is happening yet again. Understanding corruption, they may also suspect that this is a game played by Trump to permit his cronies and family members to cash in on temporary market stalls. To date the Chinese have opted to play along. They have deemed it in their interest to do so in order to keep their own economy humming.
The question now is how long the Chinese will continue to play along, i.e. whether they might decide that it's now time to call Mr. Trump's bluff and teach him and the American public a lesson: that China has real economic clout and cannot be ordered around. At some point, the Chinese will do this. The only real question is whether they'll do it now, while they're confronting a domestic debt bubble, or wait until later when they are in a better phase of their own economic cycle.
105
@Flaminia I think you overestimate the Chinese. They aren’t playing along in good faith; they just have no other option. They are in the final lap of their “Chinese miracle” with a push towards next-gen technologies and gaining political influence around the globe through BRI investments. The US, with this trade war has just caught them off guard.
They can’t retaliate at the moment partially because of the domestic bubble you talked about but also because they aren’t yet ready to sustain long-term trade war with the US. If they do, they would inflict more damage to themselves than the US.
They just wish to keep their head down, complete that final lap and then they would be ready to tech that lesson to the Americans.
if the great minds around the globe were set free to roam there thoughts and ideas everywhere anywhere we could solve our most problematic problems ..no patents no IP just putting thoughts into action unimpeded
The USTR already announced in the Federal Registry today that the rate increase is going into effect.
It's done, it's happening.
The fact that the markets did not sink proves this change is not an economy killer as it is being portrayed in the media.
1
@AutumnLeaf
It may be done but we know it can also be undone just as quickly. That's what the markets seem to be calculating.
7
Its funny how we are portraying the American side as the "spoilsport" while as of now the current reports points at the redacted version of trade proposal from the Chinese side is teh reason fro Trumps theatrics!
For once we agree China needs to stop stealing our "intellectual property" and today even building a huge aircraft carrier to compete!
Trump or not its a true fact and we definitely need to do things differently at least with China Trade!
Our "workers" are hurting still !
3
@weary traveller
We don't know what went on behind the scenes. The report about China's reneging last Friday is one piece. It's selective disclosure from an interested party (White House). I'll not assume that the Chinese just randomly reneged on their commitments without knowing the full context.
32
@weary traveller
Alas, Mr Trump's political weakness and his obvious incompetence as a negotiator (just look at his business record!) give the Chinese a strong hand, and we can be confident they will not hesitate to use it.
Perhaps they did make concessions that they're now reneging: they're doing so because they can, because Mr Trump keeps making himself vulnerable by alienating allies and undermining his own domestic position. And they will keep pushing, including reneging, as long as they can see how week the US position is because of our incompetent and bumbling loser of a President.
The main problem is that Trump has placed a deadline on Friday.
So does he look very weak or does he slap tariffs on if China does not cave.
The public way Trump did this points more to a miscalculation and a failed put.
5
The stock market, like all asset markets, is inherently unstable: it doesn't (necessarily) change when fundamentals do, then suddenly changes for no clear reason, and is subject to cumulative overshooting once change starts.
But as far as fundamentals go, one must avoid the fallacy of composition. Individual firms and sectors go up and down. The capitalist class as a whole, however, is diversified and its share of income doesn't change very much or very rapidly.
3
@Joe Ryan - excellent 'pocket' analysis
@Joe Ryan
To spell out what was implicit in my comment:
Pres. Trump's tariffs are being levied illegally (abusing authority intended for different purposes), are inherently corrupting, are disruptive and thus costly, and would harm U.S. industry in the aggregate even if they were none of these things.
But the tariffs' shifting around of profits from one U.S. industry to another doesn't materially harm diversified capitalists as a class. Especially as the tariffs also tend to shift income from consumers to businesses, where it is easier to divert.
@Joe Ryan That's why it's very significant that ALL 30 DJIA stocks went DOWN in after-hours futures trading and on the opening bell of Monday's stock market opening. The American "economy"--consumer spending--is intrinsically tied to Walmart, which sells 80% China-made products. A 25% tariff translated into a 25% price increase at Walmart will literally destroy Red Hat America.
2