Remember this, from just over a month ago?
It’s a good thing trade wars are “good” and “easy to win”, because by God we’ve got one now. Or maybe not. Because despite the fact that markets were roiled overnight as China struck back just hours after the U.S. published a list of products subject to tariffs in connection with the 301 investigation, Trump insists that what’s unfolding in front of people with working eyes and ears isn’t actually happening.
So wait, this isn’t a trade war and the reason it’s not is because there was a trade war before Trump was President and we already lost that one? Can you not have more than one trade war? Does an old trade war rule out a sequel? And why did we not “win” the first one? I thought “trade wars are easy to win”? Or maybe not for “foolish” people. And Trump is no “foolish” person, ok? Believe me.
Who knows. What we do know, is that targeting Beijing’s “Made In China 2025” initiative was a bridge too far for Xi and Beijing is now going to apply 25% reciprocal tariffs on 106 U.S. products and that includes soybeans, cars, planes and chemicals.
China is taking a measured approach to the rhetoric. “China doesn’t want a trade war”, Vice Finance Minister Zhu Guangyao said at a briefing in Beijing on Wednesday, adding that China “always calls for dialogues to solve disputes.” That said, the country “has never submitted to external pressure.”
Right. China “never responds to external pressure” and it doesn’t look like they’re going to start now.
Zhu went on to suggest that maybe Trump should recognize that “it’s time for negotiations and cooperation” and “the foundation is mutual respect.”
Well, that’s all fine and good, but make no mistake, “mutual respect” has never been the “foundation” for anything with Donald Trump and I’m not sure he’s going to be changing his outlook now.
Of course he might ultimately be swayed by the market because he loves his rally (unless of course you’re talking about Amazon, in which case he takes a kind of “can’t make an omelette without breaking a few eggs” approach). Boeing is getting crushed in the premarket, down some 6%:
Machinery stocks in general are getting killed, with Deere and CAT down hard. Whirlpool is off pretty sharply and the automakers are getting crushed early as well with GM and Ford down more than 3%. Tech darlings including Apple and Nvidia are also under immense pressure ahead of the open.
What happened to “all will be happy?” …