We've been waiting to see how Trump's trade war with China will be resolved if it ever will be, but a picture is beginning to emerge that tells us it won't be resolved. At least not entirely.
Recent reports indicated that Trump wants to make some of his tariffs on Chinese goods permanent and it wasn't clear why the Trump regime expected the Chinese to completely back down if Trump isn't willing to. But as it turns out, the White House is not asking them to.
Bloomberg reports that the Trump regime is not asking the Chinese to completely roll back their retaliatory tariffs; they're asking the Chinese to shift their tariffs onto different Americans for reasons that are nakedly political in my opinion.
China is considering a U.S. request to shift some tariffs on key agricultural goods to other products so the Trump administration can sell any eventual trade deal as a win for farmers ahead of the 2020 election, people familiar with the situation said.
The step would involve China moving retaliatory duties it imposed starting last July on $50 billion worth of U.S. goods to non-agricultural imports, said the people, who asked not to be identified because the discussions were private. The shift is because the U.S. doesn’t intend to lift its own duties on $50 billion of Chinese imports even if an agreement to resolve the trade war between the two nations is reached, one the people said.
So, while American farmers are currently getting screwed as a result of Trump's trade war, a different group of Americans could be screwed in the near future because their misfortune would be more politically expedient for Trump.
There's another detail in Bloomberg's report that caught my eye.
Another person said China would consider shifting the tariffs to make it easier to meet a proposal to buy an additional $30 billion a year more of U.S. agricultural goods on top of pre-trade war levels as part of a final deal.
In other words, our trade deficit with China will probably remain relatively static if this "deal" goes through. Chinese purchases of American agriculture may increase, but purchases of other American products will decrease as China's retaliatory tariffs are shifted to other industries. They're rearranging the deck chairs.
This would somehow be an even more cynical outcome than I predicted.