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Trump: ‘Long way to go’ on China deal. Stocks retreat from record highs

Written By | Jul 16, 2019
Great Trade Wall of China, trade deal has a long way to go

Cartoon by Ben Garrison. Used with permission. (See link in article)

WASHINGTON. Mr. Market spent most of Tuesday morning cruising slightly below flatline territory across the three major averages. Ah, but then that pernicious villain known as “headline risk” reared its ugly, familiar head. Around the noon hour, President Trump stated the obvious with regard to any real or imagined US-China trade deal. To wit: We have a long way to go.

US-China trade deal really does have a long way to go. The Chinese want to keep stealing our stuff

CNBC provides a bit more color on the Dow.

“The 30-stock index pulled back to trade 22 points lower after Trump said the two countries have a ‘long way to go’ on trade, adding the U.S. can slap tariffs on an additional $325 billion worth of Chinese goods ‘If we want.’”

No real surprise here, despite the Polyannas in the investment community and the media that keep telling us a trade deal is “imminent.” It isn’t. Forget about it. Trump’s current negotiating position is an existential threat to the Chinese Communist government’s arrogant dream of world domination in 5 years. Another doomed-to-fail 5-year plan, just like the ones Russia used to have in the idyllic era of Josef Stalin.

The Chinese understandably figured that the constantly beleaguered Trump, negotiating without any real backing from a nearly 100 percent dysfunctional Congress, would bluster a bit and then cave. Like American presidents always do. But they underestimated Trump, just like the U.S.S.R.’s Communist government underestimated a genial B-list Hollywood actor named Ronald Reagan.

China is amazed: Trump negotiates like… a New York real estate tycoon

Ooops. They have a “long way to go” this time as well.

Of course, the Chi-coms do know how to hurt a guy. They’ve been co-opting loony US ally after US ally, the latest government saps being the Philippines. (The Russians are handling Turkey’s current supreme idiot.) And in the various US-Chinese tit-for-tat tariff fusillades, the Chi-coms have very cleverly targeted a major Trump constituency, the American farmer.

The Chinese figure that by prying off this vital group of voters from Trump by hurting them badly, they’ll help drive Trump out of office in 2020. Which means they’ll likely get to negotiate with a hate-America-first fringe “democratic-socialist” president. One who’ll give the Chinese whatever they want. After all, who needs a racist, xenophobic old Amerikkka anyway? AOC and her 4 Horsepersons of the Congressional Apocalypse clearly agree with President Xi & Co. on this notion.

Evidence for the Chinese intransigence has been relatively clear all along. They’ve stolen a great deal of America’s technology secrets over many years, save for the ones Bill Clinton bargained away. (Never an MSM report on this, BTW.) They want to steal the rest. As soon as possible. Why let an out-of-control, 100% pro-capitalist New York real estate tycoon interfere with their 5-year plan? What an annoyance.

Read also: US vs Great Trade Wall of China. Negotiations fail, Wall Street gets whacked

The Chi-coms raise the Jolly Roger. Again

With regard to the current alleged negotiations – which have yet to take place – CNBC provides further evidence that the Chi-coms didn’t like it when Trump called their bluff a couple of months back. You know. When Chinese negotiators backed out of everything they’d just agreed to when they were supposed to be signing a new trade accord. Remember? CNBC does, quoting evidence that even the left-wing #NeverTrumpers at the WaPo had to report.

“… [China] suddenly added a new member to its negotiating team — the country’s commerce minister, Zhong Shan, who was present at last month’s G-20 summit and took part in a telephone conversation with U.S. representatives last week. Zhong is seen by many officials in Washington as a hardliner, a sign China’s leader, Xi Jinping, is standing firm, The Washington Post reported.

“His recent remarks in the Chinese press indicated his tough stance in the trade war.

“‘The U.S. side has provoked economic and trade frictions against us and violated the principles of the WTO. It is typical of unilateralism and protectionism,’ Zhong told the People’s Daily on Monday, according to a Google translation. ‘We have to uphold our warrior spirit in firmly defending national and people’s interests in defending the multilateral trading system.’ The People’s Daily is the official newspaper for the Communist Party in China.

“The new development dampened analysts and investors’ hope for a resolution as some see the progress ‘in reverse.’”

“In reverse” is another way of saying the current US-China trade war has “a long way to go.”

Reining in that Chinese “Warrior Spirit”

“Warrior spirit” indeed. Zhong and his pals have been flying the Jolly Roger for years. Rather than waging their piracy on the high seas, however, the Chi-coms have been ripping off business processes and technology secrets from the West by other means. In the end, though, it’s the same difference.

But, as Trump well knows, there’s a downside to this arrogance. Not for us, necessarily, but for the Communist Chinese government, according to the CNBC piece.

“The prolonged trade battle seems to be taking a toll on the Chinese economy. Data showed on Monday its economy slowed to 6.2% — the weakest rate in at least 27 years.

Which, if you want to put some puzzle pieces together, is really why President Trump continues to badger the clueless Fed to get our interest rates back down. In so doing, the Fed would alleviate some of the costs of Chinese counter-tariffs that hurt the purchasing power of the average consumer. This, in turn, would enable Trump to keep the tariff pressure on until the Chinese showed some… flexibility.

Either that, or we just cave and let the Chinese win the entire board game. That’s what the media and the Democrats won’t tell you. I will.

And so will Mr. Market. Let’s see how he takes this news over the next few trading days.

– Headline image: Cartoon by Ben Garrison. Used with permission.


Terry Ponick

Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Senior Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17