‘Noise’: One Bank’s Take On US Politics In 2019

The political landscape stateside is a bit fraught right now - maybe you noticed.

The political landscape stateside is a bit fraught right now - maybe you noticed.
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3 comments on “‘Noise’: One Bank’s Take On US Politics In 2019

  1. “Is it really realistic that Xi is going to let Trump drag him along for another year, postponing tariff hikes and negotiating in bad faith by saying one thing over dinner only to say and do things that betray a penchant for more aggression later?”

    Actually, I think this is exactly China’s desire at this point. As you say, Trump has demonstrated that he negotiates in bad faith, and he is increasingly surrounded by hardliners. The Chinese are definitely not going to just give in to Trump, which leaves them with two options: disengage (escalate) or delay. Clearly the better of those two is delay, hoping to minimize the damage until Trump is no longer a problem–which, hopefully, is two years at the most, and possibly less. So, at this point, I imagine that the Chinese are in fact negotiating in bad faith. They will continue to “make progress” in talks without cutting a real deal, hoping that Trump will extend those talks as his domestic position continues to weaken. Alternatively, they may cut a partial deal or an unenforceable deal if offered. The ultimate objective is to either cut a NAFTA-style “deal” that changes little or to delay and minimize damage until Trump is gone.

    In fact, I think there’s some reason to believe Xi is not overly eager for rapid resolution. The trade war provides political cover to continue the deleveraging effort at home in spite of economic weakness. Xi has a vast reservoir of domestic political capital, and he certainly doesn’t want the trade war to slow the economy further, but this cloud still has a few sprinkles of silver inside it for him.

    • Couldn’t agree more they will delay and foot-drag negotiations. It’s inherent in the Chinese culture to thoroughly discuss any issue.
      Heck, It takes 2 hours for 3 participants to decide where to go to lunch.

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