Supposedly, trade talks with China are going "really well". The talks are going so well that Trump Says He Will Increase Tariffs on $200 Billion of Chinese Goods.
President Trump said Sunday that he planned to increase tariffs on $200 billion of Chinese goods to 25% from 10% on Friday, as negotiations for a U.S.-China trade deal are set to resume on Wednesday.
“The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!” he tweeted.
U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin concluded high-level trade talks in Beijing last week. Those talks are set to resume on Wednesday when Chinese Vice Premier Liu He leads more than 100 officials from more than a dozen government agencies to Washington—a sign Beijing thinks final details can be ironed out, according to people close to the talks.
The Chinese Embassy in Washington didn’t immediately respond to requests for comment. Mr. Trump’s announcement came in the middle of the night Beijing time.
Trade Talk Timeline
Trump has changed his tune on a trade deal with China so many times it's hard to count.
- In December, Trump gave China 90 days to conclude a deal Otherwise. Trump said he would boost tariffs on $200 billion of Chinese goods to 25% from the current 10%.Those 90 days ended March 1.
- On December 31, I noted Trump Hails "Big Progress" on Trade Deal With China. I commented "Supposedly there is 'big progress' on a comprehensive trade deal with China. Color me skeptical."
- On January 19, I noted China Pledges US Buying Spree to Reduce Trade Surplus With US to Zero By 2024. I commented "In discussions that are not yet public, and will likely be empty promises, sources say China Offers a Path to Eliminate U.S. Trade Imbalance."
- On February 22, the Washington Post reported Trump says he expects to meet with China’s Xi and finalize new trade deal but Trump would not rule out extending the deadline beyond March 1.
- On February 24, Trump Tweeted there was "substantial progress on intellectual property" and suspended tariffs.
- On February 25, I noted Hooray! "Substantial" Progress With China (Just Don't Ask Where) in response to Trump's Tweets.
- At the end of February, Trump expected a small delay in signing.
- On March 2, I noted Trump Assails WTO "Straitjacket", Attempts Pocket Veto of Entire Organization.
- On March 12, the Washington Post stated U.S. Trade Representative Robert E. Lighthizer told the Senate Finance Committee “Our hope is that we are in the final weeks” of negotiations. However, Schumer said on the Senate floor, “It is abundantly clear that China is playing us.”
- On March 13, Trump stated that he is in No Rush to Complete China Trade Deal. “I think things are going along very well - we’ll just see what the date is,” Trump told reporters at the White House.
- On March 14, Bloomberg reported China and U.S. to Push Back Trump-Xi Meeting to at Least April
- On April 4, I commented No Foolin' This Time We're Close, Really Close to Trade Deal With China
- On April 15, I posted Trump Asks China to Shift Soybean Tariffs to Something Else.
- On April 17, I noted Postponed Again: Trade Deal With China Now "Tentatively" Set for May 27 or June
- On April 29, I posted Senator Grassley Warns "Trump’s Tariffs End or His Trade Deal Dies"
Question of the Day
I understand it takes time to work out trade deals.
But how many times can one change the target date while citing "huge progress" and not look foolish?
Trump has over-promised and under-delivered on every trade discussion, not just with China.
Two Tweets, Two Lies
Lies of the Day
- Tariff payments are responsible for 0% of "great economic results". Rather, Trump's tariffs, or if you prefer, retaliatory tariffs devastated US farmers.
- Costs are not borne by China. Rather, costs are bore by US consumers and businesses that import from China, Mexico, etc.
Yes, the trade talks are going slow.
Implied Third Lie, Just Not Today
Trump's comment that trade talks are going slowly is an admission that trade talks were not really going as well as previously claimed.
The changing timeline and today's tariff increases are further proof.
What to Make of Today's Tweets
It's difficult to know precisely what to make of today's Tweets. We will not know until we see how China reacts.
- If China pulls back or increases agricultural tariffs, it means China has had enough of Trump's BS.
- If the trade talks continue without retaliation from China, it means this is a political ploy that China is willing to go along with.
Option Two Likely
I suspect we are dealing with option two.
If so, China has agreed in advance to go along with this BS. Trump will then announce that his increase in Tariffs are what closed the deal.
My base position has not changed one iota:
- There will be a deal. It will be hyped as the greatest trade deal in history.
- Mostly, the deal will return to the status quo of China buying more soybeans and other agricultural products.
- Any other benefit that allows Trump to brag was just something that China was willing to do all along, without all this hype and theatrics.
Mike "Mish" Shedlock