Walk Away Trade Talk Tactics
A trade deal has been in the pipeline for weeks, stuck in the pipeline, but in the pipeline! President Trump is driving a hard bargain, and Sino-US fights are spilling into markets. Investors are learning to live with it, however, and now even China is too!
To protect the small American industries whose labor forces voted him into power, President Donald Trump is locking horns with China on trade. Demanding a “fairer” deal is a major gamble. To get what he wants, Trump is piling on the pressure, jacking up the import prices of Chinese goods coming in. President Xi of China has retaliated, of course, so every time tension builds, confidence suffers and markets sell-off in anticipation of further tariffs. That’s bad news for small American industries.
For over two years, market bulls have had to charge through this $500 billion trade impasse. Negotiations for “phase 1” of an agreement neared a conclusion recently, but the President was never going to turn on his favorite negotiating tactic. He’s walking away, saying “no” for now, placing his faith in those market bulls to rage on and buy shares, rather than sell them.
However, that puts the ball in China’s court! With an impeachment inquiry ongoing and American elections creeping up on Trump, his days in office may be numbered. If the world waits out Donny, his successor could bring in the trade war for a smooth landing. Where that would leave small American industries, however, is anyone’s guess!
