Why anyone puts any stock in what Donald Trump says is anyone’s guess.
Obviously, we’re all obligated to pay attention to his daily foreign policy ramblings and various rants about domestic political developments because after all, he is the President, and that means what he says matters. And indeed that’s one of the great ironies of this presidency – Trump is a notorious narcissist which by definition means he thinks everything he says is important, but his blatant disregard for decorum betrays a complete lack of awareness when it comes to just how important his words actually are.
But paying attention to Trump and understanding that what he says matters is something entirely different from believing anything he says or otherwise putting any stock (figuratively or literally, if you’re an investor) in what comes out of his mouth.
Trump has spent the better part of six months doing everything in his power to undermine the prevailing global order when it comes to trade and commerce, and every indication suggests there’s a certain part of him that enjoys the chaos and therefore has no real interest in making any deals with anyone, pretensions to dealmaking prowess notwithstanding. Just ask China’s Liu He, who thought he had a deal with Steve Mnuchin in late May only to discover, just a week later, that the protectionist contingent at 1600 Penn. was once again ascendant and that tariffs would go into effect starting on July 6.
Given all of that, it would probably be best if everyone took a wait and see approach to upcoming discussions between Trump and European Commission President Jean-Claude Juncker, who is all set to visit the White House next week for trade talks.
According to NEC Director (and man who really doesn’t want you to look at the numbers when it comes to the deficit) Larry Kudlow, Juncker is “bringing a very important free-trade offer.”
Or so Larry was told. “I can’t confirm that — that’s what I’m hearing,” he said on Wednesday, at the CNBC Institutional Investor Delivering Alpha conference in New York.
For his part, Trump appeared to tip that something big was in the works as well, telling reporters at the White House that when Europe comes to town, “they’re going to come and they’re going to try to negotiate a deal.”
Well then, it’s a good thing we’ve got a legendary “dealmaker” in the Oval Office, isn’t it?!
Trump would go on to flesh out that contention as follows:
Cars is big one.
Yes, “cars is big one” and as a reminder, if Trump moves ahead with his plan to slap tariffs on cars in the interest of “national security”, that would mark an extremely disconcerting escalation in America’s multi-front trade war.
But Kudlow thinks you’re going to like what you hear. “The president has put things on the table, the Europeans are looking at them, and we may be pleasantly surprised,” he said, at the same CNBC event mentioned above.
Maybe. Or maybe not. Because while envoys have apparently asked Juncker to try and placate Trump next week, the European Commission has started work on rebalancing measures that will be “ready to publish immediately” if Trump goes ahead with tariffs on EU car exports to the U.S, a source told Bloomberg on Wednesday.
On the bright side, it looks like Republicans are about ready to strip Trump of his ability to escalate this any further because at a certain point, you’ve got to take the crayons away from the toddler if he keeps drawing on the walls.
Great deal. EU lowers auto tariffs to match USAs 2%, and USA lowers its 25% tariff on pickups and trucks to the same level. Seeing as Americans don’t buy that many American brand cars (8 out of the top 10 by sales units are foreign brands and only Lincoln is in the top 10 of luxury cars)’ I can’t see the EU suddenly falling over themselves to buy US branded models. If you consider that US pickups and trucks have virtually no competition (due to the high tariff) yet provide the most profitable models for US auto manufacturers, the US auto industry might not be that excited. It appears that the EU have a stronger hand than Trump.