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With ‘No China Doves Left,’ Market’s Faith In Trade Deal Seems Misplaced
We're back to the days when a single phone call between Bob Lighthizer, Steven Mnuchin and Liu He can boost risk sentiment.
The trio of trade "principals" spoke over the phone on Friday, and agreed to "create favorable conditions" for the implementation of the trade deal, under which China is supposed to buy up to $200 billion in US goods and services over two years.
Donald Trump, Mike Pompeo and Peter Navarro have spent a good part of the last two weeks casting aspersions and perpetuating a t
I think the logical thing for Trump’s reelection is to intensify the anti China rhetoric and promise retribution but not actually take major steps until after November. He can’t afford a market plunge now.
Concur. Really no different than 2019’s playbook. Yes, he did layer in some tariffs over the course of the year, but he really could have gone more nuclear if he actually wanted a proper fight. Always seemed like he was doing just enough to create the desired anti-China optics, and then stopping there. Of course, the eventual “deal” was total BS in terms of substance, but the optics were good, and the market was relieved, so “Mission Accomplished”.
Trade War 2.0 won’t be any different. Mutually assured destruction still very much in play.