Phase 1
China walked out of negotiations with Trump last week because of Trump’s insistence on an all encompassing deal.
Since Trump is more desperate than China, Friday’s announcement should not surprise anyone.
Reuters reports U.S. Outlines ‘Phase 1’ Trade Deal With China, Suspends October Tariff Hike.
U.S. President Donald Trump on Friday outlined the first phase of a deal to end a trade war with China and suspended a threatened tariff hike, but officials on both sides said much more work needed to be done before an accord could be agreed.
But Friday’s announcement did not include many details and Trump said it could take up to five weeks to get a pact written. He acknowledged the agreement could fall apart during that period, though he expressed confidence that it would not.
Trump, who is eager to show farmers in political swing states that he has their backs, lauded China for agreeing to buy as much as $50 billion in agricultural products. But he left tariffs on hundreds of billions of dollars of Chinese products in place.
His announcement, while seen as progress, drew some scepticism.
“I’m unsure that calling what was announced by President Trump an agreement is justified,” said Scott Kennedy, a China trade expert at the Center for Strategic and International Studies in Washington. “If they couldn’t agree on a text, that must mean they’re not done. Wishing an agreement does not one make. This isn’t a skinny deal. It’s an invisible one.”
No Meat on the Bones
There is so little meat on the bones, the meat is actually invisible.
We have been down this on-again, off-again negotiation path for well over a year now.
Circular Setup
- Trump announces progress
- Trump demands more and more
- China walks away
- Stock market sinks
- Trump goes back to the table with the same tactics hoping for a different result
Desperation Sinks In
All the while Trump has insisted on comprehensive deal.
Despite the lack of meat on the bones, we have finally made progress of sorts.
Trump (at least today) seems willing to settle for less than a comprehensive deal.
We are now on phase 1.
Hooray! Phase 1 might be easier, especially since it’s undefined.
Unfortunately, it’s a mystery how many phases will be necessary.
Mike “Mish” Shedlock
Given the title of this thread (Trump’s No Meat on the Bones Trade Announcement With China) and the African swine flu epidemic decimating Chinese pig farms maybe its time for the US to drive for a deal on pork — before everyone else gets their foot in the door.
Has anyone parsed out the particulars of the $50 billion in agriculture sales to China that was mooted, when $ 18 billion in 2017 was the previous record ? Just BSing? Or now playing in the commodity markets with the kids? Who comes up with this crap?
Tough to watch sausage being made. I don’t know much about Trump’s negotiating style, and keep in mind this is Navarro’s swan song, he is very knowledgeable on China’s weaknesses.
Trump’s trade war has a similar quality to the Cold War. The US “won” the Cold War by getting the Soviets to overspend on military equipment. One advantage Trump’s position has is Chinese companies are heavily in long term debt used to finance operations of short trend global consumerism. Similarly, Chinese workers have a lot of debt from buying overpriced real-estate. The advantage the US has is it can rebuild its manufacturing sector, but China will have a more difficult time building a service or consumer sector due to present levels of debt. China would have riots worse than HongKong once factory layoffs reach a certain level.
Another nothingburger from the orange rat king of lies. He’s wasted his power on entitled idiocy, and now all China has to do is wait for his removal from office. The soybean farmers are waiting a bit more anxiously…. the longer they wait, the less of that market they’ll get back.
Forget about corporate profits for just a minute, Turkey has killed American soldiers in Syria. If true, if there is one dead American who died of Turkish fire then all bets are off, it makes the trade war and Brexit combined look like nothing. It changes everything.
First Trump has to go, as a clear and present danger. Wipe out all republicans who control what is going on. President Pelosi can deal with it. And, If one American GI has died then woe be to conservatives no matter where they be.
‘collateral damage’ is the name of the game….invented by the US itself….shit happens, especially when you re full of it …
Also Mish and others are missing the geopolitical story. Trump is ceding to Russia in Syria and elsewhere and pulling back from traditional allies but also may now be ceding to China on trade. In the end the Rand Paul wing of the Republican party may get what they want which is isolationism. Russia is probably planning their next invasion into the Ukraine and Syria. Trump may look the other way on Hong Kong and Taiwan and economically the US will be back to 1.5% growth while losing geopolotically. The winner in 2020 may realize that he or she was better off not having won.
“The winner in 2020 may realize that he or she was better off not having won.”
The Administrative State plans on winning, not who is running for president.
By the way I think the real reason why trump is now coming to the table is that the repo market is due to china walking away from treasuries until they can get a favorable deal. The Fed cant hold off a liquidity crisis forever and bought Trump a few months to get the trade issues resolved. There is literally no sound explanation I’ve read for the Fed intervening in the treasury market like its 2008 again. Something is amiss there and no one has asked the right questions.
Trump is a gigantic blowhard on most things. It is literally full of sound and fury signifying nothing. If he makes it to summer of 2020 he may be in the clear but I suspect by the end of the year even Republicants in the Senate will turn on him.
Trump taking a play from the Obama playbook ie master the art of bs and pretending.both these dudes have an amazing ability to make nothing look like something,and since Barak was able to get reelected after 4 years of (other than runnin up huge dept) literally accomplishing nothing, Trump believes that secret sauce ie non stop bs is the way to a 2nd term?
Except obama was given a bag of dirt to work with. Iraq war was off the books and brought on the books in 2009. Tarp and tarp II were too. Trump had a chance to do way better with the budget but he has failed. Most of the growth from tax cuts is waning and treasury receipts are basically flat . Trump is a bad version of Obama which is admittedly hard to pull off. Kudos to Trump.
“Trump is a bad version of Obama which is admittedly hard to pull off.”
President N=1 is always worse then President N, when measured by positive versus negative accomplishments. That’s just what unbroken decay of a once civilized society looks like.
Agree there. But it is a lot like breathing. Eventually somebody must take a deep breath for all the breaths out from the last president. Bread and circus. Carry on.
Yes, he literally accomplished nothing! Well, not LITERALLY literally. There was Obamacare, Dodd Frank, American Investment and Recovery Act, ended the recession, Iran nuclear deal, Paris climate accord, and put an end to torture. But still, nothing at all.
Is it too late for the farmers? Maybe they have lost their farms to debt and Big agriculture has already harvested the farmers.
For those with smaller attention spans…
it’s Donald J. Trump’s pamphlet:
“The Start of the Deal”.
LOL!!
The largest pork producer/processor in the world–Smithfield, is totally owned by a Chinese corporation.
Algo juice
Here is some meat. Basically, the US will have twice the agricultural sales to China that it had prior to the trade war.
“China has pledged to rapidly increase purchases of US farm goods to $40-50 billion a year — a sharp rise that would be more than double the level in 2017.
In 2017, before the trade war started, China imported $19.5 billion of US farm output, falling to just over $9 billion in 2018.”
https://m.economictimes.com/news/international/business/us-china-has-reached-substantial-phase-one-trade-deal-donald-trump/articleshow/71549816.cms
Trade wars are easy to win, especially against little weaklings like Vietnamese or Chinese. Just threaten and roar, and they scatter and prostrate themselves.
I have something to say about this, but Country Bob says I should STFU, since I’m a European douchebag.
Ha! Country Bob reminds me of a good hound I once had: Good hunter, but barked treed too much. And, when a hound barks treed, all the other hounds quit the trail and converge on that one hound, under the assumption that their further efforts are pointless. Safe to say the rest of us are still in the hunt and would like to hear an Irish trail bark.
Why would anybody comment if it was an American problem, except it isn’t. Tariffs are the whip, which might lead to results on trade and investment that aren’t US specific. In fact, Europe is silently involved in this, even though it pretends to hold the high moral ground. If Trump actually had a strategy, and wouldn’t have antagonized everybody, he would have a lot more support.
Very perceptive! Every politician in Europe is desperately hoping that The Donald, America’s bull in the China shop, will break every last dish in the China trade shop and set the stage for meaningful trade negotiations with China.
I view the latest developments as extremely positive. The Donald’s odds in getting Chinese negotiators to agree to kiss his ass before the world in prime time was roughly Zero. However, agreeing to agree on something(s) significant without humiliating either side sets the stage for progress, but it’s a long road ahead. Or as Hesiod wrote, “Failure lives nearby. The path to her door is wide and well travelled. Before success, however, nature places many obstacles…”
Surely Trump’s strategy (if one exists) is to hope to lock out the Europeans (and everyone else) and tie China into the US market? Anyway its been a good trade war for Australia with gold prices hitting record highs.
I have my suspicions that Country Bob is actually a Russian IRA agent.
You should whistleblow.