Trade

Trump Heads to NATO Without His ‘Greatest Deal Ever’

JM Ashby
Written by JM Ashby

For the past two months, the plan has been for Trump to meet with Chinese President Xi Jinping on the sidelines of the NATO summit in London where they would sign "phase one" of Trump's "greatest and biggest deal ever," but Trump has departed Washington for London with no deal in sight.

It seems clear that there are bigger problems, but Trump regime officials are privately pointing fingers at Hong Kong as an excuse for why Trump has left for the NATO summit without a deal in his hands.

(Reuters) - A trade deal between United States and China was now “stalled because of Hong Kong legislation”, news website Axios reported on Sunday, citing a source close to U.S. President Donald Trump’s negotiating team.

The deal was stalled also because time was needed to allow Chinese President Xi Jinping’s domestic politics to calm, the report added, citing the unnamed source.

Civil unrest in Hong Kong may very well be a factor in negotiations, but the idea that it's the only factor preventing Trump from clenching a deal doesn't pass the laugh test.

Chinese state media controlled by the ruling communist party reports that President Xi Jinping won't accept a deal that does not roll back Trump's previous rounds on tariffs even if the next round is canceled.

“Sources with direct knowledge of the trade talks told the Global Times on Saturday that the U.S. must remove existing tariffs, not planned tariffs, as part of the deal,” according to the report.

Global Times, published by the official People’s Daily newspaper of China’s ruling Communist Party, also cited another unidentified source close to the talks as saying U.S. officials had been resisting such a demand because the tariffs were their only weapon in the trade war and giving up that weapon meant “surrender.”

I suppose it would be "surrender" to give up their "only weapon in the trade war," but that's kind of the point, isn't it? That's how you resolve conflicts.

Trump's desire to keep tariffs in place so he can use them as a "weapon" demonstrates his desire to keep the trade war alive through the 2020 election so he can ratchet it up or down in any given week depending on which way the political winds are blowing.

As of this writing, we're 13 days away from Trump's next around of tariffs on about $150 billion in Chinese goods and they have not taken any official action yet to postpone those tariffs. And I don't know about you, but I'm very skeptical that a deal will be agreed to in the next 13 days. Treasury Secretary Steve Mnuchin and Trump's trade representative Robert Lighthizer have been invited to Beijing for more face-to-face talks, but they haven't even agreed to that yet.

What happens in the next two weeks could actually determine if we see a recession in the next year.

  • muselet

    Hong Kong is certainly a point of contention between China and the US. China feels sufficiently aggrieved at the moment that it feels compelled to do stupid stuff.

    Had Donald Trump not imposed tariffs—or had imposed more targeted tariffs—a lot of this mishegas could have been avoided.

    Congress didn’t help matters, either, by passing the Human Rights and Democracy Act (I’m not saying it’s a bad law, it’s not, but it was always going to be seen as provocative by China, especially in the middle of a trade war).

    And viewing tariffs as a “weapon” makes reaching a trade agreement with China even less likely. All evidence seems to indicate the Trump administration is perfectly happy to let the Trump Trade War with China grind on at least until the eve of next year’s election.

    I’m sure they’ll find someone else to blame for the recession.

    –alopecia