Trade

Report: Trump and China Have a Deal “In Principle”

JM Ashby
Written by JM Ashby

Although there is no text or final agreement for "phase one" of Trump's "greatest and biggest deal ever," Bloomberg first reported this afternoon that the two sides have agreed to a deal "in principle."

Although no one knows exactly what will be in the deal because there is no text yet, the White House is reportedly reaching out businesses and asking them to praise the non-existent deal they cannot read.

U.S. negotiators have reached the terms of a phase-one trade deal with China that now awaits President Donald Trump’s approval, according to people briefed on the plans. [...]

The terms have been agreed but the legal text has not yet been finalized, according to the people. The administration has reached out to allies on Capitol Hill and in the business community to issue statements of support once the announcement is made, they said.

This it not unexpected and I personally receive the news with a healthy does of skepticism.

As you know, this is not the first time or even the second Trump has reached a "deal" with China and yet his trade war persists. And what we know of this latest "deal" tells us that, even if it is real, Trump's trade war will persist.

Even if we generously assume that this deal will become a reality and China will accept a partial cut to Trump's tariffs, that means we'll be looking at permanent tariffs of about 15 percent for as long as Trump remains in office. And "phase one" will likely please the market in the short-term but, eventually, everyone is going to realize this means tariffs are here to stay for good.

Bloomberg did not report an expected timeline of events, but I think we can infer that there will be no official text for a deal before the new year.

  • Draxiar

    I don’t think there will ever be a trade deal as long as he’s in office. He needs the trade war to look “strong” and like he’s using his beat stick on the world. To get any deal in place means he won’t have that to brag to his cult about his big muscles. He needs it for the election and his flimsy ego.

  • muselet

    Quote Investigator:

    In the adjoining colony of Victoria, Sir Bryan O’Loghlen, M.P., who has a national right to indulge in this sort of thing, gravely told the Supreme Court that “a verbal agreement is not worth the paper it’s written on.”

    [The Irish Law Times and Solicitors’ Journal, June 1890]

    So too an agreement in principle.

    –alopecia

  • waspuppet

    He just wanted to say “the stock market went up” the day the committee voted to impeach him.

    And the day after we found out that he literally paid a $2 million fine for stealing from a charity for veterans, bringing his fraud-settlement total to $27 million JUST SINCE BEING (sort of) ELECTED, Wall Street believes this is real.

    • muselet

      Cynic.

      And you’re almost certainly right.

      –alopecia