Ever since Donald Trump started pretending that he was deep into negotiations with China to end the disastrous trade war, the stock market has been incrementally recovering. The trouble is, China holds all the leverage here, meaning the only kind of deal it’ll offer Trump is the kind that would humiliate him, and cement him as the world’s worst dealmaker.
Donald Trump had been threatening to place even more tariffs on Chinese goods as of October 1st. History has shown that these kinds of across-the-board tariffs never work, and only end up hurting the economy of the nation that implements them. Sure enough, Trump’s tariffs have had a calamitous effect on the U.S. economy, as evidenced by the jobs report and other factors. That hasn’t stopped Trump from insisting that more tariffs are somehow the answer. Except now that China has called Trump’s bluff, he’s decided to cave.
Trump just posted this tweet: “At the request of the Vice Premier of China, Liu He, and due to the fact that the People’s Republic of China will be celebrating their 70th Anniversary, on October 1st, we have agreed, as a gesture of good will, to move the increased Tariffs on 250 Billion Dollars worth of goods (25% to 30%), from October 1st to October 15th.”
Okay, first of all, why is he reduced to negotiating with one of the Vice Premiers of China? It sounds like Xi Jinping isn’t even bothering to pick up the phone anymore. Second, when you set an imminent hard deadline, and then you delay it for no real reason, you’re caving. It’s the definition of caving. We don’t know where Trump thinks he’s going with this, but it won’t end well for him.
Bill Palmer is the publisher of the political news outlet Palmer Report