When news broke that Treasury Secretary Steve Mnuchin will lead another round of doomed trade "talks" with his Chinese counterparts, I didn't even mention it here. I didn't mention it because recent experience tells us the talks would go nowhere. Each time members of Trump's cabinet have tried to sketch out some sort of deal, Trump has stomped on their toes.
You may recall that Mnuchin and Trump's trade representative Robert Lighthizer even got into a shouting match in front of Chinese officials earlier this year.
Now, it's clear that nothing has changed.
Bloomberg reports that Trump told his staff to proceed with $200 billion in tariffs on imports from China during a meeting yesterday just days after Mnuchin's "talks" were announced.
President Donald Trump instructed aides on Thursday to proceed with tariffs on about $200 billion more in Chinese products despite his Treasury secretary’s attempt to restart talks with Beijing to resolve the trade war, according to four people familiar with the matter. [...]
Trump met with his top trade advisers on Thursday to discuss the China tariffs, including Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer, the people said. Mnuchin has led a recent overture to the Chinese to re-start trade talks.
Bloomberg also reports that the tariffs haven't been formally imposed yet because they're still reviewing public comments, but color me skeptical.
If you told me they're considering if any of their political cronies should be exempted from Trump's tariffs, I would believe you, but I expect the total package of tariffs will equal nearly $200 billion in any case.
As I've said before, Wall Street is evidently populated by morons. Mnuchin's "talks" prompted a small rally on Wall Street this week where traders are far too gullible and willing to believe in fairy tales, but the happy talk is over. For now.
Wall Street falls on report U.S. to go ahead with China tariffs https://t.co/lxT98nS7Ly
— Reuters Top News (@Reuters) September 14, 2018
Wall Street and Trump are stuck in a feedback loop. Each time the market rallies based on reports that the White House has momentarily acted in a rational manner, Trump sees it as evidence that he should double down and the market drops again.