Trump has since confirmed this. Now the President says he’ll meet Xi “later”. That would appear to suggest that the deadline will be extended, but then again, who knows. As documented below, there will be another round of talks between now and then, so things could still go off the rails if structural issues aren’t addressed/resolved.
Amid the ongoing rally in risk assets catalyzed almost entirely by the Fed (and now helped along by dovish leans from a number of central banks), concerns about the feasibility of the US and China resolving the trade dispute ahead of the March deadlined have lingered.
And understandably so. After all, the structural issues and/or “the main sticking points” (if you like) are intractable and even if they aren’t, the idea that Washington and Beijing were going to come to terms on IP theft, forced technology transfer and China’s subsidizing of local industry in the space of 90 days was always absurd.
Just about the only person willing to admit as much was Wilbur Ross, whose obliviousness sometimes produces rare moments of transparency from an otherwise opaque administration. Here’s what Wilbur said late last month during the same interview that found Trump’s own personal Mr. Burns (h/t Bess on that) wondering aloud why furloughed workers don’t get bank loans:
We’re miles and miles from getting a resolution. Trade is very complicated. There are lots and lots of issues. People shouldn’t think that the events of next week are going to be the solution to all of the issues between the United States and China. It’s too complicated a topic.
Right. But nobody besides Wilbur will say that because saying as much has the potential to tank markets, which is exactly what happened just before lunchtime on Thursday when CNBC reported that Trump and Xi are “very unlikely” to meet prior to the March deadline beyond which tariffs on $200 billion in Chinese goods will more than double to 25%.
Kayla Tausche hit everyone with the bad news:
That catalyzed a quick swoon at a time when everyone was already in a bad mood thanks to more growth jitters and also thanks to Larry Kudlow, who told state television that there’s still a “pretty sizable distance” between the US and China when it comes to striking a comprehensive deal that would avoid the next escalation.
Apparently, Lighthizer and Mnuchin will give Trump their opinion on whether he should ultimately sit down with Xi after they (Bob and Steve) get back from Beijing later this month. “A delegation of U.S. deputies will conduct talks beginning Feb. 11, with Lighthizer and Mnuchin joining later in the week,” CNBC says, citing an administration official and a person briefed on the plan.
That is ridiculous. It isn’t clear why we keep finding ourselves in these scenarios where a low-level delegation has to set the stage for higher-level talks only for the whole process to repeat itself a month later. It makes sense that you want to have low-level talks first and then move things up the chain of command, but we’re repeating that charade about once a month now.
In any case, the administration apparently thinks it’s more important for Trump to have another ridiculous photo op with Kim Jong Un than it is for the President to meet with Xi to resolve the trade dispute, a testament to the notion that America is run by a publicity-seeker who cares more about “ratings” than he does about issues (because let’s face it, the only thing that will come out of another Trump-Kim summit are silly pictures).