Constructive Lies

-edited

On Friday, Treasury Secretary Steven Mnuchin halted a market selloff with a single word, "constructive".

Let's investigate trade talk constructiveness starting with comments from Kudlow as described on Saturday: U.S. and China at impasse over trade, Kudlow says new tariffs will remain.

The United States and China appeared at a deadlock over trade negotiations on Sunday as Washington demanded promises of concrete changes to Chinese law and Beijing said it would not swallow any “bitter fruit” that harmed its interests.

White House economic adviser Larry Kudlow told Fox News on Sunday that the United States needs to see China agree to “very strong” enforcement provisions for an eventual deal and said the sticking point was Beijing’s reluctance to put agreed changes into law.

He vowed the tariffs would remain in place while negotiations continue.

Beijing remained defiant, however. “At no time will China forfeit the country’s respect, and no one should expect China to swallow bitter fruit that harms its core interests,” said a commentary, due for Monday publication, in the ruling Communist Party’s People’s Daily.

China strongly opposes the latest U.S. tariff hike, and has to respond to that, Liu told reporters on Saturday.

Trump Loves Big Tariffs

To Be Tariffed

Bloomberg reports Trump Warns China to Act on U.S. Trade Deal or Face Worse Terms.

China responded with its own demands.

Vice Premier Liu He said that in order to reach an agreement the U.S. must remove all extra tariffs, set targets for Chinese purchases of goods in line with real demand, and ensure that the text of the deal is “balanced” to ensure the “dignity” of both nations.

“For the interest of the people of China, the people of U.S. and the the people of the whole world, we will deal with this rationally,” the vice premier said. “But China is not afraid, nor are the Chinese people,” adding that “China needs a cooperative agreement with equality and dignity.”

Bargaining Power

In a Global Times editorial, China said U.S. Bargaining Power Won't Improve if China Trade War Intensifies.

The U.S. has misunderstood the interests of both sides, and seriously underestimated China’s endurance,” the Global Times, China's nationalist tabloid, said on its website.

Also on Sunday, the Communist Party’s People’s Daily reported the door is open but China will not yield on important issues of principle, state media. There are no winners in a trade war, and China does not want to fight, but is not afraid to do so.

Constructive Talk Summary

  1. Trump demands China put commitments into law.
  2. China replied that "no one should expect China to swallow bitter fruit that harms its core interests".
  3. Trump ordered Lighthizer to begin the process of imposing tariffs on all remaining imports from China This would impact an additional $300 billion worth of goods.
  4. China said it would retaliate.
  5. On Saturday, Trump warned China not to retaliate or it would face worse terms. Trump Tweeted "Love collecting BIG TARIFFS!"
  6. Kudlow said on Sunday he expected retaliatory tariffs to kick in but that it had not happened yet.
  7. China warned Trump on Sunday not to underestimate China's endurance and that China is not afraid to fight.
  8. China posted its own set of demands for further talks including the removal of all extra tariffs.

Meaning of Constructive

This dialog is what's known as "constructive".

It's so constructive that further talks between Trump and have been pushed back until the end of June, subject to change of course.

Apple in Trump's Trade Crosshairs

Additional phone tariffs are likely to hit Apple hard. For discussion, please see Apple in Trump's Trade Crosshairs as China and US Agree to More Talks

Big Lies

Trump says he will use big tariffs to buy more soybeans and feed the world's poor with money left over.

Clearly, that Tweet is absurd prompting me to write Dear President Trump: Stop the Damn Trade Lies.

Mike "Mish" Shedlock

Comments
No. 1-7
Quatloo
Quatloo

I’m tarrified!

thimk
thimk

this round of tariffs will sting, forget the income tax savings , trump giveth, trump taketh away. (but we are still stuck with deficit spending). his tweets insult my intelligence.

Greggg
Greggg

"constructive". Are they sure he didn't say obstructive? The words sound amazingly similar through a Burger King microphone & speaker.

SteveVT
SteveVT

How do tariffs really hurt China in the short term? Environmental regs have eliminated domestic aluminum smelting or made it so expensive as to be prohibitive. China is the only source and we pay the dang tariff, not China. It's a tax on our business.

Casual_Observer
Casual_Observer