Trade

“they could not, but they also could”

JM Ashby
Written by JM Ashby

With just five days remaining until Trump imposes tariffs on another round of Chinese goods, what's the current status of negotiations and will Trump move ahead with those tariffs?

I have no idea and it may or may not comfort you to know that Trump's top economic adviser Larry Kudlow does not appear to know either.

The Wall Street Journal and Bloomberg reported this morning that Chinese officials expect Trump will delay his tariffs, but Larry Kudlow says they're still set to take effect on Sunday.

Maybe.

“The reality is those tariffs are still on the table, the Dec. 15 tariffs, and the president has indicated if the short strokes remaining in negotiations do not pan out to his liking that those tariffs could go back into place,” Kudlow said at a Wall Street Journal conference on Tuesday.

So, they could not, but they also could. There is no definitive decision on that yet,” Kudlow added.

It's not funny but at the same time I couldn't help but laugh when I first read this.

You can count this among the reasons why markets aren't climbing higher on news that House Democrats and the White House have reached an agreement on Trump's fake NAFTA replacement. Trade talks with China are far more consequential than the so-called USMCA and no one has any idea what's going to happen in the next few days. Not even Trump's top adviser knows what's going to happen.

My gut says Trump will delay his tariffs at the last possible minute and, in that event, it means "phase one" of his "greatest and biggest deal ever" will not be agreed to before the end of the year. And if I'm wrong and he does impose tariffs, there also won't be a deal. Obviously.

I can't see a deal coming together in the next week in any case and, if a deal is not agreed to before everyone goes home for the holidays, it seems even less likely there will ever be a deal. We're entering an election year and Trump clearly wants to keep his trade war relevant so he can use it as a backdrop during his campaign.