Back on July 24, in a truly absurd pre-dawn tweet, Donald Trump explained why his tariffs are “the greatest.”
“Tariffs are the greatest! Either a country which has treated the United States unfairly on Trade negotiates a fair deal, or it gets hit with Tariffs”, the President said, before underscoring just how straightforward he imagines this whole protectionism thing really is:
It’s as simple as that – and everybody’s talking! Remember, we are the “piggy bank” that’s being robbed. All will be Great!
As it turns out, “all” didn’t end up being “Great!” (with a capital “G”).
Fast forward three months and Trump’s stock market rally deflated in dramatic fashion. The selloff started just two weeks after the administration moved ahead with tariffs on $200 billion in Chinese goods, the first “real” escalation in what, until late September, had been but a simmering feud.
The market rout did not serve the President well headed into the midterms.
“The trade war did not yield the desired political results in the US mid-term elections”, JPMorgan’s Marko Kolanovic wrote on Monday, adding that “it did not rally the lower-income and rural base, it crippled middle-income 401(k)s a month before voting, and it alienated the business community and wealthy political donors.”
And so, Trump decided to try and deescalate the situation, an effort that culminated in the ceasefire struck over the weekend in Buenos Aires.
Analysts and other market commentators are generally skeptical about the odds that the bevy of complex issues at the heart of the trade dispute can in fact be solved during the 90-day ceasefire that was part and parcel of the Trump-Xi detente. Specifically, “experts” are worried that the extremely thorny issues of IP theft and forced technology transfer can’t be satisfactorily addressed in the space of just three months.
Larry Kudlow did his best to allay those fears on Monday, but on Tuesday morning, Trump opened his Twitter app and, as is usually the case when he starts tweeting about trade, the results weren’t great.
“The negotiations with China have already started [and] unless extended, they will end 90 days from the date of our wonderful and very warm dinner with President Xi in Argentina”, Trump began, adding that “Bob Lighthizer will be working closely with Steve Mnuchin, Larry Kudlow, Wilbur Ross and Peter Navarro on seeing whether or not a REAL deal with China is actually possible [and] if it is, we will get it done.”
So far so good – unless you count the implicit threat inherent in the first sentence.
But then it went off the rails.
“President Xi and I want this deal to happen, and it probably will, but if not remember, I am a Tariff Man“, Trump declared.
In case it isn’t clear enough, that is precisely the opposite of Larry Kudlow’s characterization of Trump as a “free trader at heart” and also precisely the opposite of what the market wanted to hear.
It only got worse from there.
“When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so”, he continued. That’s a pretty bizarre way to characterize this situation. That would appear to mean that unidentified “people and countries” are welcome to “come in to raid” our “great wealth” as long as they pay Trump for the privilege which, actually, might have been a Freudian slip for a man who probably sold out America’s democracy to Moscow.
And it continued. “We are right now taking in $billions in Tariffs,” Trump said, yet again proving that he doesn’t understand what tariffs ultimately entail.
He finished up with this:
MAKE AMERICA RICH AGAIN
There’s not a whole lot you can say about this that Trump hasn’t just said.
This would appear to indicate that his brain is once again being pulled in separate directions by the little, horned Peter Navarro that sits on one shoulder and Steve Mnuchin who sits on the other.