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 vulnerability—and possibly more flexibility—among 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 fights—which have pinched consumers and prompted painful retaliation against U.S. exports—ahead 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.

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Mike "Mish" Shedlock

Comments
Zardoz
Zardoz

The classic alligator mouth on a canary's posterior.

mpowerOR
mpowerOR

...so the hysteria over tariff/trade rhetoric continues.

Relax. It's all just a big show/bluff. And it's working.

TSPsmart.com
TSPsmart.com

Also... Delaying tariffs keeps the inventory building going until mid-terms which props the GDP reported numbers and the markets. If he enacted the tariffs today, the inventory draw down would begin and reported GDP numbers might hit the news prior to the elections.

Sechel
Sechel

The tariffs are a bad strategy for trump. not only does he risk losing chinese cooperation on north korea but he risks hurting american companies in the back-lash and causing consumers in the u.s. to pay higher prices. Republicans will stand with Trump on many things but tariffs are not really one of those items.

Farmers are still upset with Trump over their lost sales.

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