Has Trump Inflicted Enough Pain Upon Himself Yet?

-edited

The Wall Street Journal asks a question, the wrong one. I reworded the question above.

The Wall Street Journal asks Has Trump Inflicted Enough Pain on China Yet?

How much economic pressure is enough to persuade China’s communist dictator Xi Jinping to change his business model? So far his trade dispute with the U.S. is inflicting more financial pain than he’ll admit but not enough to force economic liberalization. This means that to maintain a strong U.S. economy and get re-elected, Donald Trump needs a plan B for trade expansion if Beijing disappoints him again at the bargaining table. Cutting a soft bargain with the rest of the world would drive a resurgence in U.S. business investment. Slashing U.S. tariffs on goods coming from places other than China would also exert even more competitive pressure on Beijing.

The article accurately point out many ways China is suffering.

It also notes "The U.S. is also suffering from the trade fight."

It is the second point that matters most.

I discussed China four days ago in China's Growth Much Worse Than Reported, What About the US?

Recall that for over a year Trump insisted that China work out a comprehensive deal.

Guess who caved. It was not China.

Swing States

A Fox News Poll shows Trump Nine Points Behind Biden in Wisconsin, a key swing state.

The same is happening elsewhere.

Manufacturing Alarm Bells

On Thursday, I posted Manufacturing Alarm Bells Ring on Unexpected Weakness

Not One Thing

  1. Boeing: This isn't new news, but it is reflective of Boeing's 737 MAX problems. The WSJ reports Airbus is Set to Overtake Boeing to become the world’s largest plane maker by deliveries.
  2. GM: On Day 38 of the strike, the WSJ reports UAW Workers Are Tilting in Favor of New Contract With GM 46,000 GM workers who have gone without a company paycheck for six weeks. GM promised sweeteners such as plant investments and escalated pay. But what if sales flounder?
  3. Ford: There was no strike at Ford. But yesterday, the Detroit Free Press reported Ford Earnings Dip 57%. The company blamed warranty costs, China, and incentives. CNBC reported Ford’s Shares Slide on Lower Year-End Guidance, Weak Demand in China.
  4. Caterpillar: CNBC reports Caterpillar Earnings Badly Miss the Street, Cuts Forecast Again
  5. China: Trump's trade war with china is taking a toll. Every company above is impacted in some way. So is Apple and many other manufactures.
  6. EU: Trump is also feuding with the EU and threatens tariffs on German cars. Meanwhile, the EU and UK still have not sorted out Brexit.

Plenty of Blame

The slowdown is not just one thing. ​There's plenty of blame to spread around.

​GM and Ford are both rated Junk by one rating agency. A further slip will force investment grade bond funds to sell.

With elections pending, China can be patient, Trump can't, but he has dickered around so long now, whatever he does may just be too little too late.

I am not trying to pin this all on Trump, but he certainly didn't help.

Trump desperately needs a trade deal with China, more so than the other way around.

The WSJ asked the wrong question.

Mike "Mish" Shedlock

Comments (56)
No. 1-18
L.Ron.Hoover
L.Ron.Hoover

China's just gonna let him twist in the wind. They know any deal with him is meaningless.

Augustthegreat
Augustthegreat

Contrary to what most people may believe, China wants Trump to be re-elected. That’s the surest way to keep the U.S. in the mess.

davebarnes
davebarnes

He cannot inflict pain upon himself as he lacks a single feeling bone in his body. Milton's Devil had more empathy than The Dumpster®.

Maximus_Minimus
Maximus_Minimus

I can also apply another angle to it. If Trump was a lifelong dictator, would he have to care about all this nonsense? If democracy cannot take a short term pain for a long overdue course correction, what purpose does it have in history?

lol
lol

The economy been dead(collapsed) in the water for a decade,hello!This is lost decade on roids,economy is co-opted by the central banks,they own /control virtually everything in this artificial (fake)economy where pretending everything is "booming"is far easier than confronting and fixing the myriad of issues out there.Only question left is when agent Smith knocks and orders you to come with him,how many will comply?

shamrock
shamrock

Prediction: Tariff man will be the first "president" impeached more than once. He just can't stop committing high crimes and misdemeanors.

thimk
thimk

oh and the trumpster mentioning to Ukraine possible corruption. boy did that open a can of worms as did the proposed hosting for the g20 at one of his resorts. As for wisconsin, the Foxconn move was substantially downsized.

Herkie
Herkie

"A Fox News Poll shows Trump Nine Points Behind Biden in Wisconsin, a key swing state." Not that I give credence to Faux polling but I get daily updates on the economy from The Daily Shot Editor and they had an interesting chart October 23. Unemployment has bottomed and now turned up in Wisconsin, Kentucky, Mississippi, Delaware, and Nebraska, and the chart looks exactly like the weeks before the GFC started in 2008. This was a WSJ chart.

Then there is the headline that Trump personally ordered General Mattis to screw Amazon out of that $10 billion cloud contract. Not sure if criminal liability is going to be found in that, but legal or not it stinks to have a so called president interfering with business because of a person vendetta.

China is going to weather the trade war, they have dealt with FAR worse, in the end we will be worse off than when it started and people will rue the day they ever heard the name Trump.

Country Bob
Country Bob

China's biggest risk is the brain drain that China caused via their own actions in Hong Kong.... and the slower (not zero, not negative, just slower than the last two decades) economic growth will lead to "social disharmony" as Beijing likes to label it.

The USA's biggest risk is the expectation of endless free sh!t from people indoctrinated by the socialists academia -- and the debt bubble that results.

There is no concession the US can offer that would address China's problems. There is no concession China can offer that would address the US's problems.

But Mish has a raging case of Trump Derangement Syndrome, so he's going to whine about that instead.

Tengen
Tengen

Aren't you guys abuzz with Trump's bigly announcement later this morning? Word is Trump gets to recreate Obama's lame "I killed Bin Laden" moment with al-Baghdadi, something that would have exactly zero impact. Maybe another sea burial is in store?

I'm an optimistic guy, so instead of that nothingburger I'm hoping for a real announcement, something like Brawndo choosing to locate their first factory in Indiana, or maybe Costco founding their own law school!

Six000mileyear
Six000mileyear

I agree with Mish when looking at tariffs in isolation of all other aspects of society. The reality is aspects of society overlap. Leaders are generally sociopathic, and want to acquire larger spheres of influence. Those leaders look at the big picture, the system, and understand how all these aspects interact so they may gain power. Manufacturing offshore creates a military vulnerability as the supply chain of parts can be disrupted. And the skills to make those parts also decay. Energy supplies is another way to influence a nation that cannot power its military. People have to eat. so food exports can be used as method to influence a nation. Finance systems use debt to coerce nations. If Trump is able to reverse some of these foreign influences over America, then he'll avoid a military invasion of the US.

curtmilr
curtmilr

The Tariff Strategy, though imposing some pain domestically, imposes far more pain on our adversaries. Those with TDS refuse to see this, even when those enemies make concession after concession in our favor.

Do we want to make this policy permanent? No! And Trump has relaxed them whenever the adversary came into a more accom0odative stance. Those with TDS are so blinded by their hatred that they simply cannot see progress.

RonJ
RonJ

"The article accurately point out many ways China is suffering.

It also notes "The U.S. is also suffering from the trade fight."

It is the second point that matters most."

What matters most is that U.S. corporations have helped build the next Chinese Empire.

Go in any store and read the label of items on the shelf. So many say "made in China." What would happen if some day China was to suspend all trade with the U.S.? What will happen when some coming day the Chinese government is militarily ready to take Taiwan by force?

Mish
Mish

Editor

Those who bring up TDS at every disagreement with Trump are the ones who are afflicted with some sort of disease.

My policy on free trade is well understood, and I am one of few who support trump pulling troops from Syria.

You TDS accusers ought to look into the mirror to see who has a problem

Ebowalker
Ebowalker

I hate the word tariff. It is a TAX and any libertarian, Republican, or conservative should knowtaxes kill economies. Period

Webej
Webej

For the US to demand liberalizations from China is the same as if China were to demand less liberalization in the US, or less social inequality. The US is demanding measures at odds with the very principles that guide the concept of society and social development in China. China will never enshrine the priority of so-called "market forces" above all other values.

The Chinese don't buy the "unfair trade" argument the US foists on them. They see themselves as engaged in a historical race of catch up to the modern world and assuming their rightful place in the scheme of things. They are unlikely to cede on any issues which do not make sense to them.

As for Trump, he owns the winds of economic acceleration/deceleration, even though he has just as little control as he does over the weather. Substantive deals ("capitulations") may improve sentiment, but will not change economic circumstances quickly enough to influence Nov 2020. His only hope right now is if his narrative is less objectionable than the Democrat narrative. Just as in 2016, people will be voting for the party that summons the least aversion, not the one that elicits the most support.

Matt3
Matt3

Mish is so funny! His religion is himself. Nothing is more important than cheap imports. If it hurts others, Mish doesn't care as free trade and what's best for Mish is the most important thing. It's kind of like the skit from Saturday Night with Al Franken. "what's best can be determined by what's best for Al Franken. No moral compass just like the NBA and most large corporations. If China has concentration camps and harvests organs from prisoners, oh well. That's good for those needing organs!

Herkie
Herkie

Poor Fraudzilla just cannot catch a break on the impeachment front.