Trump Gets Cold Feet on More Tariffs: US Proposes More Talks With China

After numerous pompous threats made on China, Trump may be ready to back down.

The Wall Street Journal reports U.S. Proposing New Round of Trade Talks With China.

>The Trump administration is giving Beijing another chance to try to stave off new tariffs on $200 billion in Chinese exports, asking top officials for a fresh round of trade talks later this month, people briefed on the matter said.

>The invitation from Treasury Secretary Steven Mnuchin comes as some Trump officials said they sense a new vulnerabilityand possibly more flexibilityamong Chinese officials pressured by U.S. tariffs imposed earlier this year and threats for more.

>It also follows a steady rise in political pressure on President Trump to ease up on trade fightswhich have pinched consumers and prompted painful retaliation against U.S. exportsahead of November elections in which his Republican Party risks losing congressional control.

Sense of Flexibility? Where?

The preceding two paragraphs could theoretically be true, but I propose the first isn't.

There is no new vulnerability in China. There is however a Beige Book report that shows rising concerns about tariffs in all 12 Fed districts.

The Trump administration is scared sh*tless over the mid-term elections, and rightfully so. I expect Republicans will lose the House. They could even lose the Senate if tariff blowbacks are strong enough.

Then what? Who knows?

I did not expect this flip-flop, and it's hard to say if it even is a flip-flop that will last more than a week, if even a day.

Once the mid-term elections are out of the way, will Trump abandon any deal he makes with China (assuming he makes one)?

That question has to be on China's mind. And as I have noted before, everyone now understands Trumps alleged "Art of the Deal" and is playing the same game.

Related Articles

  1. Fed's Beige Book Shows Tariff Concerns, Agricultural Weakness, Price Pressures
  2. Lagarde Warns of Emerging Market and Low-Income Shocks by Trade War With China
  3. Trump Eyes Another $267 Billion in Tariffs (And He's Foolish Enough to Do It)
  4. Mexico Learns How to Play Trump's "Let's Make a Deal" Game

Mike "Mish" Shedlock

Comments (17)
No. 1-12
channelstuffing
channelstuffing

DC badly needs the cash,they're broke!Deficits runnin 200 billion a month and adding 15-20 billion every month in fresh red ink,he's wants to continue the obama regime policies of massively growing gov't,massive growing dept,massive growin deficits!

Brother
Brother

Tariffs are being over stated wildly besides we need the money to cover the cost of China meddling in the November election as china wants you to vote liberal democrat to open free trade status and borders. Oh and so does google, amazon, apple and most major medialower case intended.

Kinuachdrach
Kinuachdrach

I guess true believers keep seeing signs everywhere that -- Finally! -- the dawn is breaking. The rest of us see the normal to & fro of real world negotiations.

We are into political advertising season ahead of the mid-term elections. Judging by the content of the ads, it seems that Democrat internal polling and focus groups show zero interest on the part of the general public in opposing tariffs. In fact the main focus of Democrat ads in my area is how they are going to attract industry and create jobs. Outside of "Crony Capitalist" circles, there does not seem to be much pressure on the Administration to bend over and return to the status ante on trade.

Roger_Ramjet
Roger_Ramjet

My guess is that Trump (and the GOP) wants to delay the full barrage of tariffs until after the midterm elections. The GOP desperately needs the markets to be at all time highs and the economy (and its outlook) as pumped as possible. Control of congress is at stake and I'm betting that everything is going to be glowing between now and the first Tuesday in November.