Trade

Reports: Trump Considers Caving to China, or Maybe Not

JM Ashby
Written by JM Ashby

Citing sources close to the matter, Bloomberg first reported this morning that Trump is considering caving to China by winding down his trade war in exchange for simple assurances from China rather than a concrete agreement.

Trump administration officials have discussed offering a limited trade agreement to China that would delay and even roll back some U.S. tariffs for the first time in exchange for Chinese commitments on intellectual property and agricultural purchases, according to five people familiar with the matter.

Some of President Donald Trump’s top trade advisers in recent days have discussed the plan in preparation for two rounds of face-to-face negotiations with Chinese officials in Washington, due to take place in coming weeks, the people said.

Meanwhile, an unarmed White House official who spoke to CNBC says that's not true.

A senior White House official said the U.S. is "absolutely not" considering an interim trade deal with China.

Bloomberg News reported earlier Thursday the Trump administration discussed putting together a limited trade deal that would delay and remove some China tariffs, citing five people familiar with the matter. The news had driven stocks to session highs.

Stocks pared gains after the senior White House official denied the report on such an interim deal.

We can only speculate, but I believe the source who spoke to CNBC was probably their former colleague Larry Kudlow and I believe the White House actually is considering caving.

That doesn't mean they will cave, but Trump fears a weak economy more than anything else and they're bound to have at least discussed the possibility.

Of course, it's also possible the idea that Trump is becoming more reasonable was leaked to the press just to make the market go up (which it did) before Trump caught wind of it and told Kudlow to deny it.

Assuming the most cynical motivations and nonsensical process has not let me down so far while theorizing how the White House works.

  • muselet

    On the one hand, Donald Trump is sufficiently erratic that he will change his mind a dozen times before bedtime.

    On the other hand, Trump is increasingly desperate for deals! he can trumpet to his followers. How desperate? He’s reported to be considering supporting the $15 billion French initiative aimed at undercutting US sanctions against Iran by buying Iran’s compliance with the JCPOA (Steve Benen quotes Senator Chris Murphy’s Twitter: “So Trump is going to give Iran $15 billion to come back into compliance with the agreement he tore up because it was the worst deal he had ever seen? My head hurts.”).

    In the end, I think Trump will make an interim trade deal with China and loudly pretend it’s the very bestest deal anyone’s ever seen in the history of trade, and one that he and only he could possibly have made. The Chinese government will go along with a sorta-kinda deal, but I can’t see it joining in the hyperbolic codswallop.

    How impressed The Base—or the ninnyhammers on “Fox & Friends”—will be remains to be seen.

    –alopecia