Surprise! China still has no idea what Donald Trump was talking about on Monday when, during remarks to reporters in France, the US president claimed “China called our top trade people last night and said ‘let’s get back to the table'”.
Subsequently, US equity futures bounced and sentiment stabilized further (“further” because things were already on the mend thanks to level-headed comments from Liu He delivered hours earlier) after an initial bout of harrowing FX trading coming off the weekend.
Both Global Times Hu Xijin and Foreign Ministry spokesman Geng Shuang later said Beijing wasn’t aware of such calls to Trump’s “top trade people”.
Fast forward to Tuesday and Beijing is still bewildered.
“I’m not aware of that”, Foreign Ministry spokesman Geng Shuang told reporters at the daily briefing, of Trump’s continued insistence that there have been high-level phone calls between the two sides over the past 24-48 hours.
“Regretfully the US has announced its decision to add new tariffs on Chinese products [and] such maximum pressure will hurt both sides and is not constructive at all”, he added.
Again, there’s a sense in which what “matters” is that Trump’s willingness to fabricate a dialogue suggests that vaunted “Trump put” has kicked in – that his pain threshold on the S&P was four straight weeks of losses.
But that doesn’t mean the US president should knowingly lie to the public about something so trivial as to whether or not a phone call did or didn’t take place. Trump might have just said he didn’t intend to escalate things further until such a time as Bob Lighthizer has talked face-to-face with Liu He. That would have accomplished the same thing, but the US president is so fixated on making China seem desperate that he conjured a phone call which clearly didn’t happen.
Meanwhile, state-run Xinhua was out with another “commentary” that strikes a defiant tone. “China has sufficient means to fight back and chooses to act in a way that is refrained and responsible to both the Chinese, the Americans and the world at large”, the piece reads. “Playing the old tricks of bullying and maximum pressure, the US administration has escalated the trade tensions repeatedly and tried to coerce China into accepting its irrational demands”.
Xinhua insists that “China did not and will not surrender”.
“We hope the US can exercise restraint, come back to reason and create conditions for our consultation based on mutual respect equality and mutual benefit”, China’s Geng went on to say Tuesday.
Now maybe Jim Cramer has something else he’d like to add.