“Trump calms the market”.
That, or some derivation of that, is what the financial media ran with on Tuesday morning to describe overnight action that wasn’t a complete debacle.
Chinese stocks were lower and Hong Kong shares played catchup after sitting out Monday’s rout for a holiday, but the yuan rose and, generally speaking, the sense of panic faded. Trump’s comments about meeting Xi at the G-20 and a couple of additional soundbites delivered at the White House on Monday evening were cited as evidence that all is not lost after all.
On Tuesday morning, Trump took to Twitter to deliver the latest “news” on the trade war. Trump, of course, is the news. Everything else that happens is just a response to something he’s said or done. He seems to realize that, but he also frames the fight with China as a struggle dating primarily to “previous administrations” who he imagines were happy to be “ripped off” by the Chinese.
“We can make a deal with China tomorrow, before their companies start leaving so as not to lose USA business, but the last time we were close they wanted to renegotiate the deal. No way!”, Trump shrieked, just after 7 AM.
He went on to parrot the notion that, somehow, America is “in a much better position now than any deal we could have made” and proceeded to suggest that all jobs “belong” in the US. He also claimed unnamed “other countries” are clamoring to negotiate with him because they’re scared of suffering the same fate as the Chinese. Then, he told Americans to “Enjoy!” the ride.
Will be taking in Billions of Dollars, and moving jobs back to the USA where they belong. Other countries are already negotiating with us because they don’t want this to happen to them. They must be a part of USA action. This should have been done by our leaders many years ago. Enjoy!
Some folks who definitely aren’t “enjoying” this are farmers. “Washington, D.C., has made another miscalculation, and the livelihoods of farmers and the communities they support is threatened”, a despairing Lynn Rohrscheib, president of the Illinois Soybean Growers, lamented on Monday. “Illinois soybean producers face greater challenges each day without a deal”, the group, which represents 43,000 farmers, said in a statement. “We see no end in sight.”
Soybeans fell to their lowest in more than a decade on Monday.
The cruel irony is that, as Bloomberg reminds you, “Trump carried eight of the 10 states with the largest soybean production in 2016, all of them in the Midwest”
For the duration of the trade spat with China, we’ve bemoaned the fact that Trump is using America’s farmers as pawns, relying on flattery to stay in their good graces. On Sunday, Trump promised the government would “spend the money that China may no longer be spending with our Great Patriot Farmers… and distribute the food to starving people in nations around the world!”
That isn’t going to happen.
Trump is destroying lives and he doesn’t care. So little does he care, that last year, around the time the government was trying to improve the optics around the farmer bailout (which was widely panned by lawmakers on both sides of the aisle), Trump started selling green “Make Farmers Great Again” hats on his official website. The price: $45. They sold out within days – even as farmers were being forced to resort to government handouts to survive thanks to the tariffs.
Meanwhile, the barrage of state media articles published in China over the last week suggests Beijing is about to marshal all of its propaganda resources in the service of turning public sentiment against the Trump administration while sparing US citizens.
Read the following translated excerpt from a post that appeared in the Global Times, for instance:
The most important thing is that in the Sino-US trade war, the US side fights because of greed and arrogance. China is fighting back to protect its legitimate rights and interests. We know why it is necessary to negotiate. The trade war in the United States is strongly advocated by one person and one team, and [in China] it is the public. China is [backed] by the entire country and all the people at the same time. For us, this is a real ‘people’s war.’
Note the reference to “one person and one team”. China is painting this as a quixotic affair perpetuated by Trump, Bob Lighthizer and Peter Navarro. And Beijing needn’t try very hard to spin it that way – after all, that is the truth.
In the same article, the Global Times underscores the fact that tariffs are, ultimately, a tax on consumers. To wit:
As is known to all, tariffs are paid by US importers, and those importers can negotiate with Chinese manufacturers to share some of the tariffs, while others pass the price increase to the consumers. Since the profits of Chinese products exported to the United States are not high, the ability of US importers to let Chinese manufacturers share tariffs is bound to be limited. This will increase the share of US consumers’ tariffs.
That Beijing is now cranking up the domestic propaganda machine and invoking the “people’s war” (a reference to Mao) suggests Xi is looking to whip up nationalist sentiment in support of what looks set to be a defiant stance from China.
“Such sentiments have found an eager audience, with a state television video vowing a ‘fight to the end’ attracting more than 3 billion views since Monday”, Bloomberg writes Tuesday, adding that “the clip was the most-read piece on China’s Twitter-like social media platform Weibo earlier Tuesday.”
If Trump thinks Fox News is an effective state propaganda tool, just wait until someone explains to him the scope of China’s state media apparatus.
Given all of this, one is left to ponder whether Trump and his not-so-merry band of trade hawks might have finally pushed the envelope too far. And not just in terms of risking an all-out media response in China aimed at placing the blame for the trade dispute squarely on the shoulders of the men who started it, but also in terms of forcing American agriculture to reluctantly come to terms with the fact that a billionaire narcissist actually doesn’t give a damn about farmers and never did.