Perhaps sensing the rally in US equities might be getting exhausted after one of the best years on record for the S&P, Donald Trump took to Twitter on Tuesday to animate reports that a signing ceremony for the “Phase One” trade deal between the world’s two largest economies is imminent.
“I will be signing our very large and comprehensive Phase One Trade Deal with China on January 15”, the president declared, in a laughably transparent attempt to juice markets (the time stamp on the tweet was 14 minutes before the open on Wall Street).
The ceremony will take place at the White House. High level representatives of China will be present. At a later date I will be going to Beijing where talks will begin on Phase Two!
This comes on the heels of Monday’s reports that Chinese Vice Premier Liu He has accepted an invitation to travel to the US to ink the deal.
More notable than the signing ceremony (which is just another photo op for Trump) is the suggestion that discussions around “Phase Two” are actually going to take place.
It goes without saying (or at least it should), that Trump could very well be exaggerating when he suggests there have been serious discussions around plans for him to travel to Beijing to talk next steps with Xi. That’s not to say nobody has mentioned it, it’s just to say it’s unlikely that any such plans are very far along.
Wall Street is not optimistic on the prospects for “Phase Two” being negotiated ahead of the election and neither, reports indicate, are the Chinese.
Nevertheless, Peter Navarro showed up on CNBC to suggest, among other things, that 2020 is going to be chock-full of “winning” on trade.
Asked by the network’s Joe Kernen (who, if he ever decides he wants to dabble in pure, unadulterated propaganda, likely has a deal from Fox on the table) if trade is passé, Navarro launched into the usual sycophantic spiel which in this case involved describing the nebulous deal with Japan as “epic”. Here’s the clip:
“That one’s in the bank, Joe, and there are four other ones in the bank”, Navarro said. “Don’t forget, we signed the epic Japan deal, we renegotiated the South Korea deal and we got Canada and Mexico”.
There is something to be said for the USMCA, but arguably, the improvements came at the behest of Democrats and organized labor, not necessarily Trump. As for Japan and South Korea, it’s by no means clear that those arrangements are game changers or even worth the hassle.
Navarro then adopted a casual cadence (which sounded wholly bizarre coming from him). “And next year, yeah, 2020, we’re gonna try and get somethin’ goin’ with Great Britain, Vietnam, Europe and anybody else who wants to fairly trade with the United States of America”, he said, donning a forced smile.
Kernen then joked about Trump’s go-to “We’ll see what happens” phrase. Navarro, unsure whether the president would find it funny, felt compelled to defend Trump against what wasn’t even an insult. “Yeah, and how’s that workin’ out? It’s workin’ out great for America”, he joked, painfully.
Asked if he was happy with the details of the “Phase One” deal, Navarro had a harder time feigning excitement. “It’s got some great stuff in it”, he mused.
Everyone knows Navarro was not a fan of the interim agreement. He went so far as to pen a letter under his anagram “Ron Vara” arguing for the US to maintain the tariffs on China and even ratchet them higher. He circulated that in Washington policy circles from an e-mail address he created for the fictional Vara.
After walking through some of the purported specifics, Navarro did his best: “Phase One, it’s a great start”.
“Let’s see what happens”, he concluded, adopting Trump’s catchphrase with a smirk and a shrug.