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
- Trump demands China put commitments into law.
- China replied that “no one should expect China to swallow bitter fruit that harms its core interests”.
- 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.
- China said it would retaliate.
- On Saturday, Trump warned China not to retaliate or it would face worse terms. Trump Tweeted “Love collecting BIG TARIFFS!”
- Kudlow said on Sunday he expected retaliatory tariffs to kick in but that it had not happened yet.
- China warned Trump on Sunday not to underestimate China’s endurance and that China is not afraid to fight.
- 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
So far the effect on metals and the dollar has been muted. The 10 and 30 year have round tripped over past 30 days. I would expect the dance to carry on for a few months and when you see DXY start to dump you will know how this resolves….and I am not sure that it will mean gold gets a bid. Gold needs a different catalyst, other than trade to get going.
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.
Maybe not in your specific example, but it could hurt china because trying to pass 25% price increases to broke consumers could result in less crap being sold. It’s not like everyone would buy the same amount. I’m pretty sure many people will be forced to cut back.
All parties always lose out in trade wars. Or, more correctly, all trading parties do. You can’t have some leech sucking 25% of trading volume out from two trading parties, without both of them losing out.
The leeches who collect the tariffs do make out. As does the otherwise useless nobodies whom it suddenly becomes important to lobby and kowtow to, in order to be granted exceptions etc. Which is why thy are being fought, between countries ran by and for leeches too dumb and incompetent to do something useful fro a living.
“constructive”. Are they sure he didn’t say obstructive? The words sound amazingly similar through a Burger King microphone & speaker.
I’m tarrified!