Trump Suddenly Has No Deadline, Talks Keep Dragin' On

-edited

Trump now says a trade deal with China might wait until after the election.

The Wall Street Journal reports U.S. Stocks Slide After Trump Signals Further Delays to China Deal.

The Dow Jones Industrial Average fell more than 400 points Tuesday after President Trump suggested a trade war with China could continue well into next year as he threatened new tariffs on several more countries.

Mr. Trump said he had “no deadline” for reaching a trade accord with China during a meeting with the North Atlantic Treaty Organization secretary-general. He added that he liked “the idea of waiting until after the election” to reach a deal.

“Tariffs will be a part of statecraft from now on,” said Geoffrey Yu, head of the U.K. investment office at the wealth-management arm of UBS Group. “There are no allies when it comes to tariffs right now.”

Trump Blasts French President Emmanuel Macron

Trump is in Europe for a NATO Summit where he also ruffled feather and talked trade.

In Europe for the two-day gathering, Mr. Trump also criticized French President Emmanuel Macron for comments he made about the 29-member military alliance, and expressed frustration with France’s new digital-services tax.

“I don’t want France taxing American companies. If they’re going to be taxed it’s going to be the United States that will tax them,” Mr. Trump said, during a freewheeling exchange with reporters that lasted for over 50 minutes.

Mr. Trump also said the French leader’s comments about NATO were “very insulting.” Ahead of the meeting, Mr. Macron gave an interview to the Economist, warning that the continent was experiencing “the brain death of NATO" and renewing his call for Europe to bolster its own military capabilities.

Turkey’s President Recep Tayyip Erdogan, meanwhile, Tuesday said his country won’t approve a NATO plan to guarantee the defense of Lithuania, Latvia and Estonia unless the military alliance declares a Kurdish militia based in Syria a terrorist organization.

“If our friends in NATO don’t recognize as terrorist organizations those we consider as such, then sorry,” he said, adding that Turkey will oppose any initiative to guarantee the defense of the Baltic nations.

Asked by reporters if he would sanction Turkey for buying Russian military equipment, Mr. Trump said of Mr. Erdogan: “He’s a very good member of NATO, or will be.”

Deal On Hold

Trump accuses China of having no credibility. Of course, Trump has no credibility either.

Both ideas are correct. Neither side can possibly trust each other at this point.

And Trump keeps putting words into China mouth about what China agreed to when it's clear China made no such commitments.

Deal Still Possible

There still could be a deal. The deadline for further Trump tariffs is December 15. That's 12 days away and a huge amount of time on the Trumpian Time Scale where his opinions change not day-to-day, but by the hour.

My base idea all along was Trump would produce some essentially irrelevant deal then brag about what would effectively be a return to the status quo. This is what he did with USMCA, his NAFTA replacement that is 95% the same the deal, with the changes arguably worse for US corporations.

Regardless, and as I have commented before, I am tired of these games and the tariffs threats we have seen for nearly two years from the self-proclaimed "tariff man".

Trump is unquestionably damaging the US with his actions.

Mike "Mish" Shedlock

Comments (28)
No. 1-12
Bam_Man
Bam_Man

Let's see what a "Big, beautiful, recession...Very big and beautiful." does to his beloved stock market. I think we've gotten a glimpse over the past few days....

KidHorn
KidHorn

In past times whenever the stock market would crash, the FED would cut interest rates and the market would have a huge bounce. The FED can't reduce rates much, so I suspect every time the market heads south, trump will announce progress on a trade deal and get a bounce. The trade deal for Trump is like impeachment for the democrats. Trump wants to drag this out and never reach a deal and the democrats want to drag out the impeachment process without ever actually impeaching.

Realist
Realist

In two years of negotiations with China, the Chinese have hardly said anything. In a game of high stakes poker, they hold their cards tight to their chest.

Trump (the great deal maker), in contrast, can’t stop talking and displaying his cards for all to see. According to Trump, the Chinese are “very anxious” to make a deal; that great progress is being made on a deal; that a phase one deal is imminent; that the Chinese have already agreed to all sorts of things that are great for America, such as buying $50b of agricultural production; that he might not want to make a deal; that he is almost done the deal; and now, that he may wait till after the next election to make a deal. What a moron!

Most likely scenario; After Trump signed the Hong Kong bill, the Chinese told him to F off.

8 Replies

Cichocki
Cichocki

I agree. I think China told him they aren't going to make a deal with him (maybe this hurts his chances in 2020?) and he's doing what he always does...spin. Of course he's going to say it was his idea and he likes waiting until after the election.

Realist
Realist

I doubt that the Chinese care if Trump wins or loses the next election. They are pragmatists. They have their plans in place for either event, and they are long term plans.

Trump, in contrast, changes his mind minute by minute. He has no plan at all. Worst President ever.

BaronAsh
BaronAsh

Trump already got what he wanted: hundred + billion per annum in tariff income and capital and manufacturing flight from China with corresponding growth for allies in the region (Japan, Korea, Vietnam etc.), plus a lessening of capital and industrial flight from the US rust belts into Pandalandia. There won't be a deal. There is no way America can be coupled with a command-and-control economy without being depleted. It's not a fair market and never will be. That isn't their model.

Now: their model may very well be the one that rules in the future since clearly it has some advantages and strengths. The current system in the USA, for example, which is quasi dysfunctional as it is, certainly couldn't manage a population of 1.5 billion (i.e. 4-5 times current levels). We don't have the technical or organisational savvy to go into various countries and built cities of 10 million overnight - let alone the one of 100 billion they are soon completing in China. Nor, more importantly, do we have an extremely competitive merit-based political system capable of maintaining stable but dynamic socio-economic dynamics with such a huge population.

But for now, we have a very different system and one that cannot merge with theirs without losing it's essential character. Trump is pursuing old-fashioned Yankee-trader style nationalism. It's not an unreasonable position. Whether it can work either in the near term (20-30 years) or longer-term (one or more centuries) remains to be seen. That will depend, most likely, not on the US, but on whether or not the new civilisation the Russo-Chinese symbiot is spearheading proves successful or not.

Is it possible for a new civilisation to exist without being under the the thumb of the old European-based credit cartels, that is the question. The jury is still out. Meanwhile, some form of economic nationalism does make sense on many levels instead of all this increasingly arcane and moribund rule by soviet (committee) such as we see in Europe.

Realist
Realist

Hi BaronAsh

That all sounds so compelling. You almost make it sound like Trump has a plan. Sadly, that is a delusion.

First; the hundreds of billions in Tariffs that Trump claims are coming from China, not to mention, paying down the national debt with them. What a pile of dung! The Tariffs are a tax on American businesses and consumers. And in spite of this tax on Americans, Trump is running a trillion dollar deficit after 10 years of economic growth, and running up the national debt like a drunken sailor. He is subsidizing farmers for their losses and yet, they are still going bankrupt in record numbers. This is a good strategy?

And who benefits from all this harm to America? Countries like Vietnam, Korea, and Japan, according to you. Brilliant! And you forgot to mention the soybean farmers in Brazil, etc.

What has Trump got. Pain in China, and pain in America.

As Mish says, no one wins a trade war, except for those who don’t participate in it.

Tony Bennett
Tony Bennett

"Most likely scenario; After Trump signed the Hong Kong bill, the Chinese told him to F off."

...

I don't know. Does not seem like good poker. I would think they would always like to have options. Anyways, if they did say that to DJT, why not make it public?

Realist
Realist

I doubt the Chinese put it exactly like that. I was paraphrasing for fun.

The Chinese say very little in public.

BaronAsh
BaronAsh

Have read several reports stating that prices have not run up because tariffs, but maybe you are right.

I agree with Mish, except that we are already in a trade war but haven't been winning for a long time because globalists have been setting the agenda which benefits Wall Street at the expense of Main Street. To Wall Streeters, anything the 'nationalists' do is anathema and therefore hardly surprising they feel that anything his trade team does is just random confusion, not part of a plan. After all, someone with a background of building huge buildings in complicated multi-level jurisdictions, sometimes taking years before anything at all happens, clearly has no background in planning.

I mean: he's just a Reality TV show host, right?

Realist
Realist

There are rarely simple answers to complex problems. Unfortunately, the US has a President who thinks that there are simple answers. The result is that he is making things worse.

I do not agree with Mish about everything. In fact we disagree on many things. However, when it comes to trade, we agree that working towards free trade is the best solution. We also agree that Trumps tariffs are the wrong way to go about improving trade.

Trump has been threatening and antagonizing everyone America trades with for 3 years. Even your best trading partners. And what has he accomplished so far? Nothing positive. He is still going backwards. If this continues for another 5 years, America might eliminate its trade deficit, because no one will be trading with you anymore. And your economy will be half the size it is now.

Corto
Corto

Isn't it about time for Kudlow to come out and talk about good progress in trade talks?

BaronAsh
BaronAsh

Sundance at theconservativetreehouse.com has a very different take. He believes that the goal is a permanent decoupling, a divorce, not a 'deal.' Trump has assembled a tight, formidable team on all this trade stuff and it is probably the main reason he got the Presidential bug in the first place (he's been talking about it since the 80's). He might well bluster and posture in lots of areas (including this one), but this turf he is taking seriously, playing the long game. Now he and his team may well have read the tea leaves wrong, but I don't think they are playing on the soundbite level as you state:

"My base idea all along was Trump would produce some essentially irrelevant deal then brag about what would effectively be a return to the status quo. This is what he did with USMCA, his NAFTA replacement that is 95% the same the deal, with the changes arguably worse for US corporations."

FloydVanPeter
FloydVanPeter

Yet another perspective: https://youtu.be/AkfZuQJTQjM

Tony Bennett
Tony Bennett

"And Trump keeps putting words into China mouth about what China agreed to when it's clear China made no such commitments."

...

Anyone remember "the phone call" this summer?

Had to laugh when Cramer said something along the line of - I sort of doubt there was a phone call, but hey, it made stocks go up ...

Mish
Mish

Editor

I second this emotion too:

"You almost make it sound like Trump has a plan. Sadly, that is a delusion."

Alternatively, if Trump has a plan, his plan is delusional.

Take your pick

njbr
njbr

Talk is cheap. Trump figured this out years ago--those little puffs of air emitted while breathing could be accompanied by sound--and it was free(!) and easy to do, so he was off to the races. Truth or lie. Serious or ludicrous--it really doesn't matter.

Sometime later Trump got the idea that talking tariffs was something tough guys do. Like breathing with sound, it's at no cost to him and easy to talk about. And people and markets react. So he does it all the time now. Truth or lie. Serious or ludicrous--it really doesn't matter.

Roger_Ramjet
Roger_Ramjet

I guess I misunderstood Kudlow a few week ago when he said that the deal was down to the short hairs. He must have been referring to something else.

thegatewayprocess
thegatewayprocess

Trump/Xi Will propel markets to Blue Sky parabolic dimensions through 2024 and then by effect into 2032. The Gateway Process

Herkie
Herkie

Mish: "My base idea all along was Trump would produce some essentially irrelevant deal then brag about what would effectively be a return to the status quo."

Common ground? The dems have been saying that Trump created the trade war to deflect attention from the collusion with Putin re the 2016 election, among other things like him having no basic policy at all. Inventing or creating a problem out of whole cloth then providing a solution that is not significantly different from the original status quo is called gaslighting. The real question is if he did not originally collude with Russia to rig the 2016 election why then did he attempt to blackmail Ukraine into a rigging scheme that benefits only two parties, his and Russia? It does not even matter if you believe the narrative that Russia rigged the election, but, having that out there true or not you would expect all candidates to avoid the appearance of ANY new accusations along those lines as if foreign interference was an actual radioactive pile. For Trump to engage in anything that even gave a hint of foreign interference is beyond stupid, it established a pattern.

There is another consideration though, theories are emerging that support the idea that Trump's announcements and tweets regarding the possibilities that one day there is a deal at hand, the next that there is no chance of a deal at all, these have been preceded by outsized moves in the options markets and someone is timing this to make historic profits trading which could not be done without foreknowledge of the announcements. We are talking about amounts that on some of the announcements and denials of agreement in the range of billions of dollars in large bets placed. Bets that were only profitable because someone knew in advance when to place them.

“There Is Definite Hanky-Panky Going On”: The Fantastically Profitable Mystery of the Trump Chaos Trades WILLIAM D. COHAN OCTOBER 16, 2019 4:25 PM

My bet is on Lindsey Graham, he is clearly being blackmailed and yet cannot be prosecuted for insider trading because members of congress are exempted from insider trading laws. He was a powerful never Trumper till shortly after Trump started the trade war and now is Trump's most ardent attack dog/protector. But, while it is true he can't be prosecuted for insider trading the optics are very bad and it is possible that he could be prosecuted under other laws such as conspiracy to commit fraud.